Revenue Cycle, Health Data, Regulatory and Health Industry
Creating Defensible Policies in Risk Adjustment Coding
Medicare Advantage risk adjustment coding has been part of the healthcare landscape for over 20 years, yet health information (HI) professionals and medical coders continue to face ambiguity when applying Centers for Medicare & Medicaid Services (CMS) rules. ICD-10-CM conventions, AHA Coding Clinic guidance, and evolving regulations often leave important questions unanswered. Without clear internal policies, organizations risk compliance issues, lost revenue, and heightened vulnerability during audits.
Bernard points out that defensible policies aren’t just about audits; they safeguard coders by protecting organizations and ensuring sustainable compliance. For HI professionals ready to strengthen their policy frameworks, the new workshop provides both hands-on learning and direct interaction with Bernard. Participants will leave with practical tools they can implement immediately and earn 8 CEUs in the process.
Why is Medicare Advantage risk adjustment coding still such a challenge for HI professionals and coders, even after decades of CMS guidance?
<Laughs> I blame the system. ICD-10 was developed as an epidemiology tool. In the USA, it doubles as a financial tool and has been used for diagnosis related group (DRG) assignment for more than 40 years. But since then, Medicare enrollment has doubled, while Medicare spending has almost tripled. The stakes are higher. At the same time, computer science and EMRs [electronic medical records] have changed the practice and business of medicine, enabling risk adjustment revenue “optimizations” on one hand, and data analytical audits on the other.
What are the biggest risks organizations face when their coding policies aren’t clearly defined or defensible?
Obviously, in an audit, you’ll want rationales and citations for why certain codes were selected. Without them, you are sunk. Documentation establishes intent and provides a trail of how decisions were made. There are also several ways that lack of good policies can silently damage an organization: productivity is slower; employee satisfaction and quality scores are lower; coders/auditors lose focus; and documentation loses its medicolegal integrity.
When an organization realizes it needs stronger internal policies, where should they start?
They should start with a budget, but most businesses want proof of concept before they will fund positions for it. So start by listening to the HIM team. What’s bugging them? Bogging them down? Where is inconsistency routinely witnessed? Solve a few of these problems, track resultant quality and productivity shifts, and crow about your successes. If you build it, they will come.
How can coding leaders ensure their policies will stand up to Medicare Advantage audits?
Documentation of the policy’s development shows intent and hopefully the logic of the result. At the very least, intentions are the difference between fraud and abuse. At best, they can sway the auditors to your point of view. Keep every version of a policy. Keep the citations used in development, log the authors, the meetings, the rationale for creating a policy. All this can help defend your position.
Coders often feel pressure between compliance and financial sustainability. How do defensible policies help them balance these competing demands?
Most policies are more about “soft” finances: increasing productivity or quality rather than direct revenue.
Other policies have profound financial effects. These may not exactly “balance” the competing demands of compliance and income, but the process of building a policy can quantify the risks. Sometimes corporations choose to assume more risk for a possible future audit rather than take a big financial hit in the short term. Other times, they may decide that the financial hit can be weathered. In either case, having a policy reduces the risk of a business being blindsided in an audit.
With new ICD-10-CM codes and ongoing regulatory shifts, what do you see on the horizon for risk adjustment policymaking?
I expect risk adjustment policymakers would like to have more input in the making of new codes and coding policy. I know that there are more queries to CMS and AHA’s Coding Clinic regarding issues of risk adjustment every year. But the ICD-10-M code-builders (National Center for Health Statistics) officially operate without consideration of financial issues.
Education and Training: Building Skills for the Future
You’ll be leading AHIMA’s new Creating Defensible Policies for Risk Adjustment Coding Workshop. What excites you most about guiding professionals through this process?
I have a passion for the ICD-10-CM classification and risk adjustment coding. It is fun to fan the fire, and nothing burns brighter than a risk adjustment coder trying to solve a documentation puzzle! Policy development can be a challenging, grown-up combination of Where’s Waldo?, Which of These Things is Not Like the Other, and Simon Says. So my inner child is happy when I am working through these problems with my peers.
Robin Tripp, MAS, RHIA, CCS-P, CPC, CRC, is Director of Education, Revenue Cycle and Coding, at AHIMA.