Improve Your Risk Adjustment Accuracy – Don’t Leave Money on the Table

The Importance of Accurate Risk Adjustment

Complete and accurate Hierarchical Condition Category (HCC) collection drives your Medicare Advantage plan’s revenue. When health plans are more accurate in coding members’ health conditions, they can receive higher payments from the Centers for Medicare and Medicaid Services (CMS). For example, CMS pays health plans up to 4 times more for a member with a diabetes diagnosis plus a complication versus a member with a diabetes diagnosis and no complications. It’s important to collect this type of member health information each year as health statuses often change. One of the best ways to collect current data is through the annual wellness visit or an in-home assessment (IHA).

With a spotlight on increasing IHAs through member outreach, the ROI on this type of initiative is large. Even allowing for IHAs that do not identify net new diagnoses, every visit completed is worth between $1,000 and $2,400. That means that for every additional 1,000 IHAs completed, a health plan could get up to an additional $2.4 million from CMS.

In our work with multiple clients, we’ve improved member engagement to drive significant value. Here are our top three tactics to reach more members and increase kept appointments with IHAs.

Targeting

To make the most of this outreach, we look to target members most likely to complete the action we are asking - in this case making an IHA appointment. Throughout our experience, we consistently see that members who completed an IHA last year are most likely to complete one this year. We’ve seen that up to 15% of this group will eventually accept a visit. For a recent client, we recommended targeting this group of members.

Segmentation

After identifying a target group, we then recommend segmenting members into smaller subgroups. For another client, using a mix of claims and social determinants of health (SDoH) data, we created five segments. One segment was comprised of members who likely had undocumented HCCs. These members are critically important to collect data on. Another segment included members likely to have SDoH challenges related to transportation.

Messaging

A major reason for segmentation is that these subgroups lend themselves well to more personalized messaging. For instance, the group with undocumented HCCs received messaging focused on the possibility that they may have complex care needs. For this group, we highlighted that while it can be hard to get several issues addressed at a provider office visit, during an IHA, they get a provider’s focused attention with more time to develop a care plan just for them. For the segment with transportation issues, we messaged to the benefits of a provider coming to the member’s home – removing the need to travel to a doctor’s office. When messaging to specific and personalized information, we often see a lift in member engagement anywhere from 20% to even 300%.

Results

We’ve done this type of work for multiple healthcare payers and have seen the following insights and results.

• lower income members are up to 50% more likely to accept IHAs than wealthy members
• completion of IHAs up to 3x the control group
• multiple health plans realizing millions of dollars in value from CMS payments

Consistent and complete coding of HCCs is too important to leave to chance. Developing an effective strategy for IHAs should be part of every health plan’s yearly outreach. Optimizing these communications through such tactics such as targeting, segmentation, and messaging can quickly generate millions of incremental dollars. These dollars are essential for taking care of your members and providing them with needed services.