Risk Capture and Risk Adjustment
Payers use risk adjustment to set budgets for value-based care arrangements (i.e. ACOs, Medicare Advantage, AQC, and other risk contracts) and to “level of the playing field” when comparing utilization and expenses across provider groups.
Risk Capture is the coding and documentation of chronic and complex diagnoses in a face-to-face patient-provider encounter each calendar year, the results of which generates a risk score. This individual risk score reflects the predicted overall resource use (claim dollars) for each person relative to the claim dollars for an average risk person. Accurate risk capture has been proven to drive favorable performance in value-based care arrangements, promote data integrity to reflect the true illness burden of patients, and ensure patients are connected to appropriate care and resources to address their medical conditions.
|Sample Adjustment||Group A||Group B|
|Total Medical Expenses (TME) Per Member Per Month (PMPM)||$400||$500|
|Average Risk Score||0.8||1.2|
|Health Stats Adjusted TME (C=A/B)||$500||$417|
Example: Group A vs. Group B on managing utilization and medical expenses (*Assumes Groups A and B have the same member months)
Risk Coding relies on Hierarchical Condition Category (HCC) coding, a risk-adjustment model originally designed to estimate future health care costs for patients. The Centers for Medicare & Medicaid Services (CMS) created the model in 2004, and it is becoming increasingly prevalent as health care systems move to value-based payment models. Hierarchical Condition Category relies on ICD-10 coding to assign risk scores to patients.
Partners Strategy for Capturing Risk
In fall 2016, Partners Population Health developed a four-prong strategy to drive risk capture work. In developing, implementing, and sustaining activities that support this strategy, Partners is focused on leveraging technology, pursuing high impact opportunities, using data to drive population health initiatives, and avoiding contribution to physician burden.