The latest proposed regulations released at the end of October were more of a reminder to heath plans of the Risk Adjustment Data Validation (RADV) regulations already in place rather than a slew of new proposed changes. The Centers for Medicare & Medicaid Services (CMS) provided an overview of the audits they conducted over the past few years, reiterated the methodology utilized, and commented on the amount of dollars recouped from these audits thus far. Even though it encompassed a lot of already published material, CMS is open to comments around the February 24, 2012, final methodology for the RADV error calculation.
CMS is opening the door to conduct RADV’s in a manner they see fit based on the analysis they are conducting. This means CMS would utilize various sampling and extrapolation methodologies to conduct the audit. One variable way to extrapolate and sample CMS discussed was through a sub-cohort methodology. This methodology would focus on a more refined approach to selecting the sample based on possible trends CMS sees with certain diagnosis codes and hierarchical condition categories (HCCs). CMS has talked about wanting to utilize this methodology for a few years.
As risk adjustment has evolved over the years, the emphasis to ensure a complete and accurate program increases with each year. The initiatives a health plan should put in place for risk adjustment should be developed based on two primary principles: 1) Reduce the risk of the organization during an audit, and 2) Ensure information being submitted to CMS is complete and accurate.
Through this latest proposed regulation, CMS is making it clear they want all health plans to clearly understand the regulations that have been in place for years to ensure they are prepared for stricter auditing processes going forward with steeper financial ramifications.
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