4 Key Risk Adjustment Trends Health Plans Need to Know Going into 2022

As we head into an uncertain 2022, with the emergence of yet another COVID variant and alternate modes of care delivery rapidly evolving, healthcare stakeholders continue to take stock of the long-term business and financial impacts on their organizations.

Risk adjustment is no exception, with rule changes, increased scrutiny and ongoing innovation making the space a complex and evolving arena. As we enter a new year, we look at four key risk adjustment trends and their expected impact on managed healthcare in 2022 and beyond.

1 - Transition to 100% EDS for Risk Adjustment Encounter Submissions

In 2015, Centers for Medicare & Medicaid Services (CMS) began using diagnoses from encounter data submitted through the Encounter Data Processing System (EDS) in Medicare Advantage risk score calculations. Previously, CMS had relied on the legacy Risk Adjustment Processing System (RAPS), which features far less diagnostic and encounter detail than EDS. CMS has since continued to use a blend of data from RAPS and EDS to calculate risk scores.

In 2021, risk scores were calculated with 75% encounter data and 25% RAPS data, and in 2022, CMS will be using 100% EDPS encounters for plan payment, marking the end of a six-year transition period. During this shift, plans have been focused on achieving payment parity between the two systems, with varying degrees of success.

Now that the transition is nearly complete, plans need to focus on improving the quality of their EDPS submission data, thus ensuring the completeness of their supplemental data, and fixing errors raised by CMS. They can do this by:

• Performing a RAPS to EDS revenue neutrality impact analysis to determine the impact of the transition.
• Ensuring risk adjustment reporting processes can be run using 100% EDS, creating reporting models that rely solely on encounter data.
• Assessing the prevalence of behavioral health conditions that have impact on population health identification and stratification.
• Having a thorough understanding of the policies and procedures to quality EDPS submissions, which comes with increased complexity and required procedural checkpoints.

Organizations that are prepared and follow the above recommendations will be best able to address the potential impact to reimbursement and revenue flow and make corrections along the way.

2 - Incorporation of Telehealth into Prospective and Retrospective Risk Adjustment Programs

After a rapid uptick in telehealth as a necessary care delivery modality at the beginning of the COVID-19 pandemic, the volume of telehealth visits decreased significantly in 2021. However, CMS is still allowing diagnoses made during telehealth visits to be risk adjustable for 2022 payment.

As we enter a new year, the telehealth adoption rate is expected to continue to increase, given in large part to the fact that 82% of seniors report they have high-speed Internet access, and 91% of Medicare Advantage plan members report a positive telehealth experience.

Because of the growing consensus that telehealth will become a permanent feature in healthcare delivery, it’s advised that health plans provide telehealth member outreach and encourage member utilization as a strategy for revenue risk mitigation. Plans should also continue to validate telehealth codes during their retrospective chart reviews, ensuring that all criteria are met for risk adjustment.

3 - Ongoing Impacts of Deferred Care Due to COVID

It is becoming increasingly clear that deferred care in 2020 during the beginning of the COVID-19 pandemic took a severe toll on the health of people who deferred care. Plans will see higher expenses in 2022, 2023, and beyond because of this deferred care.

In the coming months, It will be critical that plans step up their efforts to recapture chronic conditions, and plans should employ predictive modeling to determine members who are at increased risk of negative outcomes resulting from deferred care. Care management teams and risk adjustment teams should coordinate to ensure that members are getting support in managing their chronic conditions, and that physicians are thoroughly reporting chronic conditions to health plans.

4 - Increased Risk Adjustment Scrutiny and Oversight by Federal Regulators

In 2020, the Office of the Inspector General (OIG) released a report that concluded that Medicare Advantage organizations are disproportionately inflating risk adjustment payments through their in-home assessment and chart review programs. This comes on the heels of an accelerating Risk Adjustment and Data Validation (RADV) audit cycle, not to mention high profile lawsuits in recent years that have targeted major health plans for improper risk adjustment up-coding. Plans need to pay attention to this scrutiny and incorporate compliance programs into their risk adjustment workflows to minimize their exposure to improper payment errors.

With 2022 almost upon us, it’s clear that those in Risk Adjustment must be prepared for ongoing change and uncertainty. At Vital Data Technology, we understand that it often takes a trusted partner to help navigate this rapidly shifting space.

Our Affinitē Risk Adjustment is an integrated solution for improving risk scores and streamlining the payer workflow, with advanced analytics and suspect logic that identifies revenue opportunities, ensures an accurate assessment of risk, and provides a complete financial picture. We make the risk adjustment work cycle seamless by ensuring that all claim and chart review encounters are submitted through the EDS.

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