Understanding the Recent OIG Report and the Value of Health Risk Assessments in Medicare Advantage
Today Medicare Advantage provides health coverage and security for more than 24 million seniors and Americans with disabilities – 40 percent of the total Medicare population. Value-based care, including care coordination and care management are basic tenets in Medicare Advantage. Medicare Advantage plans and providers deliver high-quality care to beneficiaries, resulting in a 99% satisfaction rate, nearly $1,600 in annual cost savings, and improved health outcomes – particularly for the most chronically ill beneficiaries.
On September 10th, the Office of Inspector General (OIG) at the Department of Health and Human Services (HHS) released a report on the health risk assessment (HRA) process in Medicare Advantage.
The report dubiously claims that, “Billions in estimated risk-adjusted payments supported solely though HRAs raise concerns about the completeness of payment data, validity of diagnoses on HRAs, and quality of care coordination for beneficiaries.”
OIG’s reporting that supports this claim is rife with gaps and limitations; drawing sweeping conclusions based on incomplete data from 2016 that impacted only one percent of payments in Medicare Advantage for 2017—payments that may have been used to provide care and services for these beneficiaries.
This blog post discusses the role of health risk assessments for care coordination and describes and comments on some of the OIG report’s most troubling omissions.
Background on Payment in Medicare Advantage
Medicare Advantage health plans are paid a prospective capitated payment based on the characteristics of the population they cover and the anticipated costs to care for each beneficiary. Payments are risk-adjusted based on the demographics and health conditions of enrollees. Risk adjustment is the process of changing the rate a plan is paid for each enrollee based on the health status of the beneficiary. Risk adjustment ensures that payment in Medicare Advantage is adequate to cover the true cost of beneficiaries’ care.
For the risk adjustment process to work properly, it is critical to collect data on the health of all Medicare Advantage beneficiaries each year and in fact, Medicare Advantage plans are required to do so. Accurate documentation of diagnoses is a critical component of the risk adjustment process. It provides the opportunity to assess all of the person’s clinical and social needs and communicate those needs to other clinicians caring for the patient and to address risks the enrollees themselves may not have identified as requiring attention. Additionally, it supports care management and high-quality services for beneficiaries based on their conditions.
What are health risk assessments?
Health risk assessments are conducted in both Traditional Fee-for-Service (FFS) Medicare and in Medicare Advantage. These assessments can be conducted in a variety of ways including the “Welcome to Medicare” physical which is done within the first 12 months of a beneficiary enrolling in Medicare Part B, a routine annual physical, or an in-home health risk assessment.
Importantly, in-home health risk assessments can only be conducted by licensed clinical professionals like doctors and nurses. These types of health risk assessments help to not only reach homebound beneficiaries, but they also provide a more complete, accurate picture of the beneficiary’s health. When a clinician enters the home, they gain an understanding of not only any clinical diagnoses but can also determine if there are environmental hazards in the home (e.g., tripping risks, stairways, poor lighting, lack of grab-bars in the bathroom). Such insights as to environmental hazards or challenges in the home may not arise when a beneficiary is at the doctor’s office.
Health risk assessments, regardless of where they are done, also help to identify gaps in care, enable care coordination, and offer important information for care management. The information that is obtained via these assessments are used by care teams, which include the primary care physician, care manager, and other staff, to identify additional resources and benefits that may be available to the patient. In addition, information on health status is used to reach out to beneficiaries with particular health conditions to encourage engagement with a clinician, schedule appointments, follow-up on medication adherence, or offer wellness programs tailored to their conditions.
In order for any diagnosis that is obtained during a health risk assessment to count towards the beneficiary’s risk score in the risk adjustment process, there must be documentation in the medical record. Previous studies have shown that beneficiary health status does not change dramatically year over year, even as one’s health status can improve or decline. For example, someone who is a diabetic continues to be a diabetic. This can be similarly true for many chronic conditions.
Oversight of Medicare Advantage
In the report, the OIG made five recommendations to CMS. Two of the recommendations are related to oversight and are the only recommendations with which CMS concurred. The OIG recommended that CMS provide targeted oversight of the top 10 parent organizations that have their risk adjustment driven by in-home health risk assessments and the top 20 Medicare Advantage contracts where in-home health risk assessments drive risk adjustment.
These recommendations seem to relate to or duplicate the process of verification already in place as described above, as well as the current oversight process already in place through Risk Adjustment Data Validation (RADV) audits. These audits are conducted to validate payment accuracy in Medicare Advantage. These audits verify the diagnosis codes and other data submitted by Medicare Advantage plans against the beneficiary’s medical record.
Limitations of the Report
The OIG’s report claims that “among the 1.3 million beneficiaries who had an in-home HRA that added diagnoses to the encounter data, there were no other encounter records of visits, procedures, tests, or supplies that contained the diagnoses reported on the HRA.” However, this fails to mention that the OIG’s review did not look at beneficiary medical records or encounter data from all of 2017. Had this additional review been conducted, the OIG may have been able to validate these diagnoses.
The OIG acknowledges they only looked at encounter data when calculating their risk score estimates, which was newly in use and an incomplete data set. In 2017, encounter data only represented 25 percent of data used to calculate the blended risk score and payment. The other 75 percent came from the Risk Adjustment Payment System (RAPS), which was not included in the calculations in the study. The OIG also acknowledges that when they reviewed RAPS data, “…99.5 percent of the diagnoses included on our payment analysis were also reported in RAPS.”
In addition to not looking at a complete data set, the OIG classified any diagnosis that was the result of a home visit as one that came from an in-home risk assessment. This generalization is problematic as it does not account for the fact that these diagnoses could have been the result of a medical consultation rather than an in-home health risk assessment.
The OIG continues to cherry-pick parts of the risk adjustment process to review rather than the process as a whole. This tunnel vision consistently results in misinformation to the public and risks distorting the true utilization of HRAs, even as they acknowledged that in-home HRAs are an effective way to conduct risk assessments.
In-home HRAs are beneficial to Medicare Advantage enrollees both because the home as site of care adds to clinical understanding of an individual’s health status and is a personal, convenient way for plans and providers to engage with beneficiaries. Finally, HRAs play an essential role in obtaining the information necessary for accurate payment and successful care management which leads to improved care for millions of Medicare beneficiaries.
Learn more about the Medicare Advantage risk adjustment process in our 2018 whitepaper and read about the value of in-home care in a 2019 Spotlight on Innovation report of our Ally organization, Landmark Health, here.