Commercial risk will be a critical catalyst of progress – it’s complicated, but is it possible? We think so.

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Why it takes a physician executive to ensure accurate risk adjustment

May 17, 2017

    Of the health systems and medical groups Advisory Board Consulting is helping to more accurately risk adjust, the most progressive all have one thing in common: the clinical head of the medical group or ambulatory network is actively leading the effort.

    Accurate risk adjustment influences your reimbursement under Medicare Advantage, Medicare Advanced Payment Models, and even some commercial contracts. The linchpin of successful risk adjustment is capturing patient complexity through adequately documenting patients’ Hierarchical Condition Category (HCC) codes.

    We recently overviewed risk-adjustment concepts for Medicare ACOs in a primer, but the most important thing for ambulatory and population health leaders to know is that the responsibility for risk adjustment sits squarely on top of their physicians’ shoulders.

    It takes physician leadership to ensure clinical benefits remain the focus of risk adjustment

    One health system client in the Northeast saw first-hand the clinical impact of more accurate HCC documentation. During a routine office visit with a new provider, the decision support we embedded into the electronic health record (EHR) alerted the provider that the patient had previously been diagnosed with an aneurysm, which had gone undocumented for several years. The aneurysm was at risk of rupture and in need of surgical repair, and the alert allowed the surgeons to take appropriate precautions with the surgical procedure underway and develop the right care plan to address the aneurysm.

    This is just the type of clinical intervention that better risk management is meant to facilitate. But health system leaders need to be intentional about getting physicians bought in to more accurately capture and document patient complexity with HCCs. Physician leadership here is critical because the best way for physicians to take an active interest in documenting complexity is by illustrating its clinical benefits.

    At most of the health systems and medical groups we've worked with, the primary physician leader for the ambulatory network is in the best position to communicate the clinical validity of documenting complexity. And organizations can take this endeavor a step further by making sure this individual has a seat at the table when it comes to risk contracting strategy. It shows that the organization recognizes the true value to patients of being able to better manage risk and, thereby, accurately measure their complexity.

    The most effective structures involve partnerships with non-clinical leaders

    Although physician leadership has an important role, any effort to more accurately capture and document complexity is wrought with operational components as well as financial implications. So, the right combination of clinical and non-clinical leadership proves most effective. We have a few examples to share, and at the end of 2016, these organizations realized increased accuracy in HCC capture and greater documentation of the available Chronic HCC conditions (as indicated through clinical and billing data) to 82%, 85%, and 88%, respectively.

    The first example is at a large, progressive health system in the Southeast. This organization set up a dyad model in which the physician leader of primary care partnered with an operations executive to oversee the group working on accurate complexity capture. This physician serves as the steady voice to ensure clinical integrity, while the operations executive manages execution. This linkage allows both parties access to necessary resources and a seat at the table for risk contract negotiations.

    We're also working with an integrated health care provider in the Northeast that has a triad model (rather than a dyad model) owning risk adjustment. It includes the ambulatory CMO, the vice president of risk-adjusted contracting, and the corporate CFO. Arming the CFO and CMO with accurate risk capture and potential reimbursement data empowers this team to negotiate with the payers to take on more delegated risk at the right time, which often leads to risk-adjusted reimbursement success.

    Lastly, an academic medical center in the Southeast is delegating oversight to more than one strong physician leader. The organization tasked two executives to own risk adjustment: the CMO of the medical group and the vice president of population health. The CMO had a full plate overseeing the clinical function and performance of the medical group and the VP of population health has limited capacity. So, they chose two physicians to own parallel risk adjustment work streams. These two physicians report up to the dyad leadership team.

    An opportunity for physician executives to shine

    Given the high value associated with accurate risk adjustment, those driving this initiative not only assume responsibility for the effort but for its success as well; therefore, this undertaking can be an opportunity for a physician executive to elevate their profiles within the organization.

    But no matter the risk adjustment leadership model, at the end of the year when performance evaluations are due, the roles, responsibilities, and metrics that align to risk adjustment success should be formally and explicitly laid out in the leaders' job descriptions. We just hope that most organizations choose to involve their physician executives, and that physician leaders take the initiative to have ownership stake in it.

    Understand the role of HCCs in risk-adjustment programs

    As providers go at-risk through multiple payment models, investing in a long-term Medicare strategy is crucial.

    Download the Primer

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