Four ambulatory CDI strategies to improve overall performance
As American healthcare transitions from fee-for-service to value-based care, a growing number of healthcare systems will generate a significant portion of their revenue from risk-based payment models. In these new models, caring for more complicated patients results in higher capitation rates. While this may be good news for provider organizations — especially organizations that serve many older or chronically ill patients — there are several steps healthcare systems need to take to ensure success in these new payment models.
In risk-based payment models, including Medicare Advantage, payors assign risk factor weightings to a broad range of specific health conditions and demographic categories. They then generate an overall risk score for each patient using statistical modeling. The resulting score is a significant determinant of the reimbursement amount the provider will receive for treating that patient. Therefore, complete and accurate diagnoses determined as early in each year as possible will ensure that all appropriate revenue is received for each patient treated.
The effectiveness of the methodology depends on accurately reporting diagnostic and demographic data. However, physicians are trained to care for patients, not collect data. The difference between the information currently captured by physicians and the information necessary for generating accurate risk scores is often significant. As a result, provider organizations that care for complex patients are often under-compensated for the care of the population they serve.
While it is understandable that physicians want to minimize time spent on documentation, the need for accurate diagnoses and documentation will not disappear. In the realm of value-based care programs (e.g., Medicare Advantage and other payor programs), diagnostic documentation, including encounter data, laboratory results, clinical evaluation and all EHR contents will play an increasingly important role in the overall performance (quality care and financial) of provider organizations. Following are suggested areas to help organizations succeed in a value-based environment and will help to appropriately optimize patient risk scores.
- Leverage EHR capabilities
Although most medical practices have invested heavily in EHR software, few practices benefit from the full extent of their software’s features. The main issue is that while practices collect extensive coding data, they have historically used it for billing purposes, leaving the strategic implications of the data largely untapped.
To begin leveraging clinical data, start by focusing on template design. For instance, many practices have not set up their EHR to allow them to capture data accurately. As a result, their systems are not taking advantage of powerful EHR functionalities for documenting conditions. By configuring EHR templates to accurately capture this data, practices can generate more accurate risk scores. Additionally, Medicare Advantage is increasingly relying on encounter data to justify diagnoses codes. Properly utilized, this data within an EHR will provide valuable information that will improve the healthcare organization’s overall performance.
- Capture diagnoses with ICD-10
Information such as patient age and gender are meaningful in risk modeling, but the effect of specific and complete diagnoses on a patient’s risk score can be exponentially greater.
The problem is that physicians historically understood how to use CPT codes to document procedures, however they are not typically trained to accurately document diagnoses using appropriate ICD-10 codes (for value-based contracts, the diagnosis code sets the capitation rate, so it is critically important to get it right). Since some physicians are not generating complete and accurate diagnosis codes, their documentation often fails to accurately demonstrate the complexity of their patients.
For example, a physician may indicate that their patient is overweight when the patient is morbidly obese. Incomplete reporting traps patients in lower risk categories which can reduce the capitation rate while also affecting the overall quality of patient care.
- Make sure to document sensitive diagnoses
Physicians occasionally avoid documenting a sensitive diagnosis — such as major depression or morbid obesity — out of consideration for the patient’s feelings. In other cases, the physician hesitates to document a preexisting condition that could jeopardize the patient’s coverage under a fee-for-service plan.
These practices, though well intentioned, reduce the patient’s risk score, possibly resulting in reduced capitation rates for the organization. It could also affect the quality of the care provided. By ensuring documentation is as specific and complete as possible, physicians will improve care quality and coordination, therefore serving their patients better while generating all the appropriate revenue from the payor.
- Document all diagnoses every year
Many physicians and medical practice administrators are unaware that patient risk scores are “reset” every year. Under Medicare Advantage, diagnostic data is collected each year and used to calculate patient risk scores. But on January 1 of the next year, patients are considered completely healthy until diagnostic documentation from that year proves otherwise; therefore, physicians must re-document all continuing patient diagnoses every year.
This is particularly true for patients with chronic conditions that increase their risk scores. For instance, a patient’s bipolar disorder or COPD will not count toward their risk score unless it is re-documented each year. To avoid inappropriately low risk scores, it is important to document both significant medical history and ongoing conditions annually and to the highest appropriate level of specificity.
Accurate diagnoses increase capitation rates and improve patient care
All of these approaches help increase the accuracy of patient risk scores, leading to appropriate capitation rates and payments. The key is to improve the means of capturing patient data, particularly diagnostic data.
Practices that optimize their documentation processes can thrive under value-based care. Precisely documenting diagnostic data can also help physicians leverage data to provide better care to patients. Organizations should consider implementing an automated tool that ensures the steps outlined above and others are accomplished with minimal manual intervention. Such a tool should more than pay for itself by ensuring accurate risk scores while providing actionable data that will enable continuous improvement in most facets of a provider organization’s operations.