Saturday, December 8, 2012

Medicaid Risk Adjustment

By Jessica Thain


There are a number of people across the United States who are currently taking advantage of the Medicare Advantage plans offered through the Centers for Medicare and Medicaid services. In order to properly determine the number and amount of payments to be given to the beneficiaries of these plans, the Centers for Medicare and Medicaid have developed the Medicare risk adjustment model.

One of the most important parts of a effective Medicare risk adjustment is being able to appropriately predict the care costs of a patient connected to a particular disease. Currently Medicare gets its information from the patient's health plan in the form of claims data as the method for defining the payment for risk adjustment. This means that from the data gathered through the information given to Medicare by private health insurance companies is the main source of determining how much payment these private plans should receive to cover their member's likely health care costs.

The ability to estimate correctly what the cost of care is going to be for an individual member is a vital aspect in making an accurate risk adjustment model. The risk adjustment model used by the Centers for Medicare and Medicaid services utilizes information that is gained through claims data as well as the patient's health plan to develop the cost estimates for that member.

Since so much of the information gained from claims reporting is used to base the Medicare risk adjustment numbers off of the importance of accurate claims reporting by the health insurance and health care providers is very high. Detailed and correct reporting will help to produce more accurate numbers and decrease the amount of errors. A number of errors that usually occur with this model are due to the reporting done during patient interactions and visits as well as the level of communication between health care providers, insurance companies and CMS.

One of the common errors is that of applying or listing a limited number of diagnostic codes to patients. In some cases patients will be listed to have a certain number of diagnostic codes, when in fact there are many more codes that apply to their health and situation that haven't been listed. In order to get a proper risk adjustment for each individual patient, health care providers and private health insurance plans will need to pay closer attention to the recording of each patient encounter and application of the necessary diagnostic codes.




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