ACA Risk Adjustment Payment Breakdown

While the $10.4 billion halt still looms over issuers, it’s clear it won’t be a credit rating issue for them based on latest news. Health plans and providers have been lobbying and vocal about the impacts this hold has on their members/patients who are enrolled in an individual or small group risk-adjusted commercial plan. It has been status quo for operational processes in hopes the payments get released in October when they are planned to occur.

While the payments wait in limbo, let’s take a deeper dive into the actual payment transfer for the 654 issuers that participated in 2017 with results that equate to a $5.2 billion payable and $5.2 billion receivable. Here are some observations noticed from reviewing the transfer payments:

  1. Some issuers are still not submitting all of their diagnosis codes/claims to the EDGE server. Issuers with a higher risk population are the ones that should be on the receiving end of the transfer, but in some markets they have payables, which is a sign of internal operational issues around claims processing and data submission.
  2. Model changes impact trends. Keep this in mind as you are comparing transfer payments from prior years. Take into consideration model and factor change impacts.
  3. Some issuers are having large swings from year to year. These trends should be relatively consistent when the same membership is obtained, and typically only slight changes should occur to account for benefit design demographic changes.

Risk adjustment is a complex process with many factors that impact the overall success of the program. The operational lift to submit all claims, ensuring all diagnosis codes are accounted for, and the multitude of validations that occur is no small task and requires an enterprise-lift approach within an organization to accomplish all components successfully to ensure a complete and accurate submission occurs. For assistance with market research, strategy, data submissions, or any other critical topic impacting your organization, contact me at jsmith@gormanhealthgroup.com.

 

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Jessica Smith
Jessica Smith

Jessica Smith is Vice President of Healthcare Analytics & Risk Adjustment Solutions at Gorman Health Group (GHG). In this role, she is responsible for the execution and oversight of risk adjustment consulting services for managed care, provider practice, and commercial market clients, and leading and integrating cross-functional teams to ensure superior performance outcomes related to risk adjustment operations. Read more

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