The new risk adjustment methodology combines ICD diagnosis codes into groups called Hierarchical Condition Categories (HCCs) to produce a more accurate risk score. It will reduce the incentive for insurers to cherry-pick healthier enrollees.
Focus on the High-Risk Members
For Medicare Advantage payers, understanding the value of risk adjustment is essential. This complex process ensures that an individual plan’s enrollees’ health conditions, risk factors, and demographics are accurately documented and reimbursed accordingly. It’s also the best way to help members connect their medical needs with cost and care quality, a critical distinction that can boost members’ perceived value of their plans.
Payers must be able to counsel their high-risk members into products better suited to their needs while guiding them to disenroll from plans that offer low or negative premiums, rich supplemental benefits, or leaner core medical coverage. However, this is challenging, especially for older members who have invested in these plans and may resist changing their choices.
While the current medicare advantage risk adjustment model focuses on historical medical spending to predict future costs, some experts suggest that it could worsen inequities by failing to account for structural differences in access to healthcare. One solution is to use more data sources, including social determinants of health, to improve the model’s accuracy, though others fear this would encourage overprescribing.
In addition to improving risk-adjustment outcomes, the most successful Medicare Advantage payers can leverage their unique strengths in marketing, operations, and data analytics to drive consistent internal controls and better financial performance. By focusing on these critical areas, health plans can deliver a better experience for their Medicare Advantage members, ultimately maximizing revenue and driving resiliency in the face of ever-changing regulations.
Develop a Strong Relationship with the Plan
For Medicare Advantage plans, few things are more critical than risk adjustment. It fuels the annual incentives earned through star ratings and pays for plans to pursue year-over-year improvement in benefits and member engagement. It’s the only source of revenue that helps plans build competitive capabilities, and it’s the only way that plans can provide members with access to the best care and support programs.
Health plan leaders must master three critical fundamentals to achieve accurate, compliant, and positive risk adjustment results. If they do so, they’ll be positioned to drive strong provider engagement and ultimately positively impact health outcomes.
A certified medical coder might describe risk adjustment as ensuring diagnosis codes are accurately captured on claims. At the same time, a chief financial officer would say it’s a way for CMS to compensate MA plan healthcare providers for their clinical burden. Regardless of the definition, it’s clear that many private Medicare payers are struggling to keep up with the changing landscape of the risk adjustment model and to maintain their internal controls for accurate coding and prior authorization.
A new set of regulations and mandates from the Centers for Medicare and Medicaid Services (CMS) stands to dramatically change the future of the MA program and the entire healthcare ecosystem. Navigating these sweeping changes requires a renewed commitment to customer-centricity, and it’s an opportunity for healthcare payers to set themselves apart from the competition.
Become a Trusted Advisor
Become a trusted advisor, and you can elevate your relationship with the customer to strategic partnership status. It means having a seat at the table and being involved in their strategic decisions. It is a big step up from the vendor position that most AE’s are trapped in, and it requires different skills, strategies, and mindsets.
Having empathy for your clients is a big part of this. It means understanding their problems and what they’re trying to accomplish but also having the ability to point out where they might need to improve or go in a direction that doesn’t serve them. It’s about having a long vision, not just thinking about the sale today, but how you can serve your and their clients for life.
Another essential part of this is being prepared for each engagement. It includes having the information in front of you and being able to answer any questions the client might have quickly. It also involves listening intently and knowing when to stop listening.
It’s also about being reliable and following through on your promises. Trusted advisors don’t break trust – they know that not delivering on what they say will tarnish their reputation and make it challenging to return from that.
Become a Strategic Partner
Having the right strategic partner can be a game changer for your business. Whether providing additional services, helping you grow your client base, or simply expanding your capabilities, any potential partner must be a good fit for your business. It means evaluating things like company culture, services, and operations.
Any strategic partners should complement your business and offer a service your team cannot do internally. It could be anything from marketing, integration, technology, or finance. The important thing is to ensure that any potential partnership is mutually beneficial and that both businesses can absorb any costs associated with the partnership.
All parties must agree on financial budgets and strategies to ensure a potential strategic partnership succeeds. It’s also worth establishing an alliance-management team that monitors progress against defined metrics and flags any issues as they arise. One large payer that works with dozens of strategic partnerships has found this to be effective in keeping their alliance teams focused on priorities and creating a more consistent and coordinated approach. Private Medicare payers’ strategic decisions today will determine their ability to compete as the landscape changes. They must constantly evaluate and develop new capabilities to adapt to evolving risk adjustment opportunities to stay competitive.