Mentor Research Institute

Healthy Contracts Legislation; Measurement & Value-Based Payment Contracting: Online Screening & Outcome Measurement Software

503 227-2027

Healthplan and Medicare Advantage Risk Scores and “Clawbacks”

Why is this Article Important to Provider Practices?

  1. The laws pertaining to Medicare and Medicaid are not the same as the laws pertaining to commercial Healthplan contracts. If you bill Medicare and the patient has a Medicare Advantage (MA) plan, you are at risk for criminal investigation and prosecution by the Department of Health and Human Services. Healthplan can only cancel your contract and sue you in civil court.

  2. Risk scores are used by Medicare to pay Healthplans an agreed upon amount per patient or a fixed amount for a large number of patients. The amount paid is based on a “Risk Score.” Medicare establishes a specific reimbursement amount based risk scores for certain patient types. The hope is that the risk score is reliable and valid was to categorizing patients. Healthplans which pay more or less than the allowable range expected amount for patient types are subject to risk adjustment audits.

  3. As many 5 cases can be audited. The audit will be used to determine a risk score which are compared to the risk score for other patients with similar diagnoses, or are the same patient type. Depending on the audit, the Healthplan may be paid more or less in the future for such patients. If the risk score is low, based on evidence in the chart note, and the provider is paid for an excessive amount services, the Healthplan can recoup the amount.

  4. If a provider treats a patient with extremely serve problems 3 times a week for the first year, 2 times a week for the next year, and 1 time per week in the current year, that provider will almost certainly be audited. The potential recoupment could be as much as $52,000. So it is important that the provider document adequately.

Introduction

To ensure the accuracy and integrity of payments made to Medicare Advantage (MA) plans, a Medicare risk adjustment audit is conducted. These audits are essential for maintaining the proper allocation of funds within the Medicare system and involve several key elements.

Purpose of Risk Adjustment Audits

The primary goal of a Medicare risk adjustment audit is to verify that the risk scores assigned to beneficiaries are accurate. Risk scores are used to adjust payments to MA plans based on the health status and demographic characteristics of enrollees. Higher risk scores indicate sicker patients who require more resources, leading to higher payments to MA plans.

Audit Process: Selection and Review of Records

The audit process begins with the selection of records, where a sample of medical records from MA plan enrollees is chosen for review, usually based on specific criteria to ensure a representative audit. Auditors then review the selected medical records to verify the diagnoses reported by healthcare providers, ensuring that these diagnoses are properly documented and meet the criteria for risk adjustment.

Validation and Recalculation

The auditors check whether the documented diagnoses in the medical records match the diagnoses submitted by the MA plans to CMS (Centers for Medicare & Medicaid Services). Only certain diagnoses are considered for risk adjustment, and they must be supported by appropriate documentation. Based on the validated diagnoses, the auditors recalculate the risk scores for the audited enrollees. This step determines whether the original risk scores and, consequently, the payments were accurate. If discrepancies are found, CMS may adjust the payments to the MA plans, with overpayments being refunded and underpayments potentially being compensated.

Financial and Compliance Implications

The implications of these audits are significant. Incorrect risk scores can lead to substantial financial adjustments for MA plans. Accurate risk scores ensure that plans receive appropriate compensation for the care they provide to their enrollees. MA plans must comply with CMS regulations and guidelines for risk adjustment reporting, with non-compliance potentially resulting in penalties and sanctions.

Quality of Care Implications

Additionally, accurate risk adjustment helps ensure that MA plans have the resources necessary to provide high-quality care to beneficiaries with varying health needs. Medicare risk adjustment audits are critical for the integrity and sustainability of the Medicare Advantage program. They help maintain fair and accurate payment systems, ensuring that funds are appropriately allocated based on the actual health needs of the enrolled population.

Recoupment of Overpayments

The results of a Medicare risk adjustment audit can potentially be used by health plans to recoup overpayments from providers. During the audit, if CMS identifies that the diagnoses submitted by the health plan and reported by providers were not adequately supported by medical records, this can lead to the identification of overpayments to the health plan. CMS notifies the health plan of the audit results, detailing any discrepancies and the amount of overpayment identified. Upon receiving the audit results, the health plan may seek to recover the overpaid amounts from the providers who submitted the unsupported diagnoses. This process is typically governed by the contractual agreements between the health plan and its network providers. Contracts between health plans and providers usually include provisions that allow the health plan to recoup overpayments if it is determined that incorrect or unsupported diagnoses were submitted.

Notification and Appeal Process for Providers

The health plan will notify the providers involved, detailing the findings and the amounts to be recouped. Providers may have the opportunity to appeal or dispute the findings if they believe the diagnoses were correctly supported. The health plan may recoup overpayments through various methods, such as deducting the overpaid amounts from future payments to the provider or requesting direct repayment from the provider.

Importance of Accurate Documentation

Providers must ensure accurate and thorough documentation of diagnoses to support risk adjustment submissions. Proper documentation helps avoid recoupments and ensures compliance with CMS guidelines. Providers have the right to appeal audit findings if they believe the diagnoses were properly documented, and the appeals process allows them to present additional evidence to support their claims.

What is a Risk Score and Risk Adjustment for Psychotherapy Service?

In psychotherapy services, a risk score is a measure used to assess the likelihood that a patient will experience negative outcomes or require intensive mental health care. This score helps clinicians identify patients who may need more intensive monitoring, support, or interventions. Risk scores in psychotherapy can be used for various purposes, including treatment planning, resource allocation, and identifying patients at higher risk for issues such as suicide, self-harm, or severe mental health crises.

Components of a Risk Score in Psychotherapy

Risk scores in psychotherapy are typically calculated based on a combination of factors, including:

  1. Clinical Factors:

    • Mental Health Diagnoses: Certain diagnoses, such as major depressive disorder, bipolar disorder, and schizophrenia, may contribute to a higher risk score.

    • Symptom Severity: The severity of symptoms, such as anxiety, depression, and psychosis, can affect the risk score.

  2. Historical Factors:

    • Previous Mental Health Episodes: A history of hospitalizations, previous suicide attempts, or past episodes of severe mental illness can increase the risk score.

    • Treatment History: Response to previous treatments and adherence to prescribed therapies are considered.

  3. Behavioral Factors:

    • Substance Abuse: Co-occurring substance use disorders can elevate the risk score.

    • Behavioral Indicators: Behaviors such as self-harm, aggression, and withdrawal are important indicators.

  4. Psychosocial Factors:

    • Social Support: The level of support from family, friends, and community can influence the risk score.

    • Life Stressors: Recent or ongoing stressors, such as loss of a loved one, unemployment, or relationship issues, are factored in.

  5. Demographic Factors:

    • Age and Gender: Certain age groups and genders may have higher risk profiles for specific mental health issues.

Calculation and Use of Risk Scores

Risk scores in psychotherapy are often calculated using standardized assessment tools and clinical judgment. These tools may include questionnaires, structured interviews, and validated scales. Clinicians use the gathered data to assign a risk score, which can be used to:

  • Guide Treatment Planning: Higher risk scores may indicate the need for more intensive or frequent therapy sessions, additional support services, or referral to specialized care.

  • Monitor Progress: Risk scores can help track changes in a patient's condition over time, providing insight into the effectiveness of interventions.

  • Allocate Resources: Mental health facilities may use risk scores to prioritize resources and ensure that high-risk patients receive the necessary attention and care.

  • Identify High-Risk Patients: By identifying patients at higher risk for adverse outcomes, clinicians can implement preventive measures and early interventions.

Example

A patient with a diagnosis of severe depression, a history of suicide attempts, and recent significant life stressors would likely have a high-risk score. This patient may require more intensive therapeutic interventions, close monitoring, and possibly coordination with other healthcare providers to ensure comprehensive care.

Importance of Risk Scores

Risk scores in psychotherapy are vital for enhancing patient safety, improving treatment outcomes, and ensuring that resources are directed to those who need them most. They provide a structured approach to assessing and managing risk, allowing clinicians to make informed decisions about patient care.

A risk score in psychotherapy services is a tool used to evaluate the potential for negative mental health outcomes in patients, guiding treatment planning, resource allocation, and risk management. By considering various clinical, historical, behavioral, psychosocial, and demographic factors, clinicians can effectively identify and support high-risk patients.

References

DISCLAIMER and PURPOSE: This discussion document is intended for training, educational, and or research purposes only. The information contained herein is based on the data and perspectives available at the time of writing. It is subject to revision as new information and viewpoints emerge.

For more information see: https://www.mentorresearch.org/disclaimer-and-purpose

Key words: Supervisor education, Ethics, COVID Office Air Treatment, Mental Health, Psychotherapy, Counseling, Patient Reported Outcome Measures,