Introduction
CMS introduced a new model for Medicare Advantage (MA) payments to improve accuracy and cost prediction. The current model, based on outdated ICD-9 codes, struggled after the 2015 transition to ICD-10. For 2024, CMS reclassified HCCs, building them from scratch to reflect current disease patterns and treatments. This update, with input from clinical experts, ensures that diagnosis codes are more clinically sound and better predict Medicare costs.
Why The Call for a New Model – V28
CMS expects the new V28 model to improve the accuracy of relative weights by reflecting updated utilization, coding, and expenses. For CY 2024, this adjustment will decrease MA risk scores, which are projected to generate approximately $11.0 billion in net savings for the Medicare Trust Fund. The changes aim to optimize Medicare spending and resource allocation.
The new CMS-HCC risk adjustment model (V28) brings notable financial impacts to health plans and medical practices in Medicare Advantage (MA). Although funding isn’t reduced, a 3.56% average increase in risk-adjusted payments, amounting to $11.4 billion, is expected in 2024. This shift from V24 to V28, calibrated with 2018 diagnoses and 2019 expenditures, fully embraces ICD-10-CM, enhancing coding precision with over 7,000 code changes.
Key Changes in CMS HCC V28 and Their Implications
The HCC model plays a critical role in assigning risk adjustment factor (RAF) scores and forecasting future healthcare costs for Medicare Advantage patients. Starting in 2023, HCC v28 will be phased in gradually over a three-year period. For 2023 dates of service, risk adjustment will be based on 33% from the v28 model and 67% from the v24 model. By 2024, the v28 model will account for 67%, and by 2025, it will be fully implemented at 100%.
What has changed?
The revisions in HCC v28 are designed to capture more recent healthcare trends, particularly focusing on HCC codes that show the greatest differences between Medicare Advantage and fee-for-service models. Additionally, newer data and clinical insights have been incorporated to ensure conditions remain stable predictors of costs, improving payment accuracy for Medicare Advantage plans.
CMS has introduced significant updates to the HCC model with V28, set to roll out in 2024. These changes will majorly impact risk adjustment factor (RAF) scores, affecting a large percentage of Medicare Advantage patients. Key updates include:
- Addition of 29 new HCCs
- Renaming and renumbering of HCC codes
- Changes in ICD-10-CM to HCC mappings
- Adjustments to coefficient values
- Removal of 2,236 diagnosis codes
- Addition of 209 new diagnosis codes
Best Practices for Effective Transition to V28
- Ensuring Comprehensive Documentation and Accurate Coding:
Effective CMS risk adjustment hinges on meticulous documentation and precise coding. Providers must capture all relevant patient conditions, diagnoses, treatments, and coexisting conditions in detail. Regular training for coding staff is crucial, covering the specifics of HCC V28 and any recent updates. Well-informed staff can significantly reduce coding errors, minimizing risks of underpayment and compliance issues. - Utilizing Technology to Enhance Coding Accuracy:
Technology is instrumental in enhancing coding accuracy. Advanced tools such as natural language processing (NLP) and machine learning algorithms analyze unstructured clinical notes to extract relevant data. Automated coding software can cross-reference patient records with HCC V28, flag discrepancies, and suggest appropriate codes. These technologies streamline the coding process and alleviate the burden on healthcare staff. - Implementing Regular Audits and Quality Assurance:
Regular audits are essential for maintaining compliance and data accuracy. They help identify coding discrepancies, allowing for timely corrections before data submission to CMS. Integrating quality assurance programs, such as peer reviews and external audits, ensures that documentation practices are consistently improved and aligned with CMS guidelines. - Keeping Up-to-Date with CMS Guidelines:
CMS risk adjustment guidelines are dynamic, with models like HCC V28 introducing new categories and coding rules. Providers should establish systems for monitoring CMS updates, including subscribing to newsletters, attending conferences, and participating in webinars. Staying current with these changes ensures that coding practices remain compliant and optimized for reimbursement.
By integrating these strategies, healthcare providers can optimize their approach to CMS risk adjustment, ensuring accurate and fair reimbursement under the HCC V28 model.
How the CMS HCC V28 Model Affects Financial Outcomes
In reclassifying HCC mappings for v28, CMS employed a process called constraining, assigning the same coefficients to related HCCs. For instance, Type 2 diabetes mellitus without complications (E11.9) now has a higher risk score in v28 (0.166) compared to v24 (0.105). Conversely, diabetes with peripheral vascular disease sees a reduced risk score from 0.590 in v24 to 0.166 in v28. This change will significantly lower RAF scores for patients with diabetes complications. CMS anticipates that v28 will better reflect current utilization and costs, projecting a -3.12% impact on Medicare Advantage risk scores and billions of savings.
The Role of Risk Adjustment Vendors in CMS HCC V28 Compliance
Partnering with risk adjustment vendors can enhance the accuracy and efficiency of coding and documentation processes. Vendors offer specialized expertise, advanced tools, and training to help providers navigate HCC V28. Selecting a vendor with a proven track record and deep understanding of HCC V28 can streamline risk adjustment, ensuring compliance and effective reimbursement.
Risk adjustment vendors are essential allies in managing CMS risk adjustment complexities. They provide specialized expertise and advanced tools that improve coding accuracy and documentation efficiency. Additionally, these vendors offer crucial training and support, ensuring providers remain compliant with CMS guidelines. When choosing a vendor, healthcare providers should seek those with a proven success record and deep knowledge of the CMS HCC V28 model. A reputable vendor will deliver comprehensive services such as data analytics, coding audits, and compliance monitoring, helping streamline the risk adjustment process and enhance overall effectiveness.
Coding: A Critical Component for HCCs Governing V28 Model
To address the financial implications of the new HCC model changes, medical practices and health plans should invest in staff training and education to stay compliant with updated coding requirements. Collaborating with certified medical coders and auditors for internal reviews can help identify and rectify coding issues.
A recent AAPC Services case study highlighted that providers and coders often struggle with ICD-10-CM combination coding and specifying codes, resulting in a 14% error rate. With each HCC valued at approximately $2,500, this error rate could cost large organizations around $527,500. Proper training and auditing can help mitigate such losses.
V28 and the Promise of AI in Medical Coding
The evolution of the CMS-HCC model highlights the critical need for accurate and efficient code extraction from medical records. As the complexity of medical coding continues to grow, achieving precision becomes increasingly challenging. Fortunately, Artificial Intelligence (AI) presents a compelling solution to this issue.
AI-powered medical coding solutions leverage advanced Natural Language Processing (NLP) technology. By enabling end-to-end risk adjustment solutions, RAAPID’s NLP capabilities can seamlessly interpret and analyze the intricacies of clinical language. Whether deciphering a doctor’s handwritten note or extracting relevant details from a typed discharge summary, cNLP ensures that valuable information is accurately captured and utilized.
In an era where precise coding is crucial for compliance and effective risk management, RAAPID’s AI-driven approach stands out as a transformative tool, streamlining the process and enhancing overall efficiency.
Conclusion
It is crucial for Medicare Advantage organizations to navigate CMS risk adjustment despite its complexity. To optimize reimbursement under the new CMS HCC V28 model, providers need to focus on best practices such as thorough documentation, advanced technologies, regular audits, and staying updated with CMS guidelines. Collaborating with experienced risk adjustment vendors can enhance accuracy and efficiency. The HCC V28 model presents new challenges but offers opportunities for improved reimbursement. Adopting these strategies along with new-age AI-powered solutions enables healthcare organizations to confidently manage CMS risk adjustment, ensuring financial stability and high-quality patient care. Prioritizing accuracy and compliance will drive a successful transition into the V28 scheme of requirements.
