Risk Adjustment Strategies in the Outpatient Setting: From Concept to Capture

Risk Adjustment Strategies in the Outpatient Setting: From Concept to Capture

This monthly blog will discuss all the components of quality clinical documentation with a comprehensive approach to cover all areas of the healthcare industry.

By Susan Richards Morgan, CCS, CPHQ, CPC, CDEO, CRC, CPMA, CEMC, CPC-I


As the current healthcare paradigm continues to shift to value-based care models with an outpatient emphasis, addressing outpatient clinical documentation is prudent. Yet, tackling the 125.7 million hospital outpatient visits and 990.8 million physician office visits is overwhelming. Clinical documentation improvement (CDI) and coding professionals with a strong understanding of risk adjustment concepts and compliance can develop a successful strategy to capture accurate health status of their organization’s outpatient population.

Concept: The Value of One

An individual with an attributed risk score of 1.0, when compared to the entire Centers for Medicare and Medicaid Services (CMS) population, would be expected to use an average amount of healthcare resources during a one-year period. It is important to remember new enrollees are assigned a demographic-only risk score and no disease states are added until after 12 months of data are collected. Disease states that contribute to individual risk scores are those that are expected to increase the use of healthcare resources. An individual beneficiary with a risk score of less than 1.0 is perhaps reflective of a demographic-only status or the individual may be in good health and expected to use fewer healthcare resources. Conversely, an individual beneficiary with a risk score of >1.0 could be expected to incur more healthcare costs than the overall average CMS population.

Risk scores can be aggregated to analyze a patient panel for a provider or organization. When analyzing an aggregate patient panel, large organizations are often close to a 1.0 collective risk score. Individual provider patient panel risk scores may have somewhat larger variations as the sample size is much smaller than a large accountable care organization (ACO) in total. A large number of new enrollees in a single year may skew an organizational risk score to be lower than expected.

Problems arise with risk adjustment methodology when medically complex patients are underrepresented through inaccurate or incomplete diagnosis coding on claims submission. Patients can also be given inflated risk scores when historical or inactive conditions are inaccurately coded as active. Thus, risk-adjusted patients provide opportunities for collaboration among providers and CDI/coding professionals. When using risk score to evaluate whether documentation opportunities are present, the CDI professional will need to determine whether the documentation completely represents a patient’s current health status. There may be additional opportunities to more accurately capture a patient’s health status through coding.

Compliance: A Complete and Accurate Picture

CMS does a couple of things to ensure the integrity of risk scoring. First, CMS is statutorily required to maintain an average risk score of 1.0 for its population. Risk scores inflated by inaccurate diagnosis coding could lead to CMS making adjustments to its formula to maintain the 1.0 average. Second, the “Medicare Miracle” occurs annually and all conditions comprising an individual beneficiary’s risk score are wiped from that beneficiary’s risk score. This includes conditions such as amputations that never resolve. CMS is interested in active conditions under medical management and will not reserve any additional healthcare resources for historical or unmanaged conditions. For a complete picture of the current health status of an individual it is important for CDI professionals to work with clinicians to document with specificity all active conditions that affect current patient care and management.


Because providers often document conditions that are never coded or submitted on claims, organizational strategic planning should include structured coding review to completely capture and submit all documented conditions. CDI specialists can partner with coding teams and providers to develop organizational guidelines used for the accurate capture of diagnosis codes.

Provider education can be directed with queries narrowed to conditions where further specificity in documentation makes a difference, such as diabetes or chronic kidney disease. While outpatient coding professionals can also glean diagnoses from radiology and laboratory reports, these sources are not accepted for HCC coding. Providers can be advised to document their interpretation of radiology and laboratory findings. Discourage providers from inserting an entire active problem list into the medical decision-making portion of their notes. Instead, create a work flow that allows clinicians to take advantage of high clinical value encounters.

Comprehensive clinical encounters such as Transitional Care Management visits and Annual Wellness Visits (AWVs) are opportunities for providers to completely document all conditions currently affecting patient care and management. These visits are usually scheduled and allow staff an opportunity to review the chart prior to the encounter. Transitional care management encounters occur only when a patient’s health status has changed significantly enough to require an inpatient hospitalization. CDI professionals and coders reviewing hospital discharge summaries may identify new or changed diagnoses to help providers accurately update active problem lists.

An AWV can be used to identify both open quality measures and active conditions under medical management. Only diagnoses from face to face provider encounters may be used in HCC capture. Therefore, structuring an AWV workflow for HCC capture needs to include a face-to-face encounter with a physician or advanced practice provider. A CDI or coding professional can review problem lists to detect unspecified diagnoses, inactive conditions, or unlinked manifestations.

Outpatient CDI for risk adjustment purposes includes both clinical documentation specialists and coding professionals. Concentrating efforts on scheduled comprehensive visits that include clinical staff in the workflow will be appreciated by providers with heavy patient loads. Organizations may also choose to partner with Medicare Advantage plans who offer detailed beneficiary information, which CDI specialists can use to identify patients with health records that may benefit from documentation review. Vital and focused outpatient CDI programs with a team approach can enjoy successful outcomes in value-based care.


Susan Richards Morgan is a coding operations manager with Duke University Health Systems Patient Revenue Management Organization.

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  1. For eye speciaty they don’t document very well so in their assessment they list diagnoses but no plan really, can you code a condition that is listed in his assessment and plan if it states for example NS-OU, that’s all that was documented or they will write OBSERVE after it. I guess my question is what can and can’t code from the assessment?

  2. Very well laid out! I am glad you brought up the AWV and how, for risk adjustment capture, the visit must be conducted by a qualifying provider. Often, when systems attempt to alleviate provider workload by having ancillary staff conduct the wellness visits (per CMS guidelines on CPT capture) the risk adjustment diagnosis capture is lost in the attempt.

    It also is quite scary just how many inflated RAF scores I see in my work on CDI. When I look at a patient holistically from the claims level it’s astounding how many codes hit a claim in a year that are historical or misrepresented in the documentation. So I share your concern that CMS could decide that an average risk score of 1 is does not accurately represent the average patient any longer and decide to raise the average based solely on messy claims data.

    Provider workflow has long been a rallying point for me. There are so many “technology solutions” out there that claim to assist providers in selecting diagnosis codes that accurately represent the patient picture or assist with documentation requirements, but I’ve found that the “problem with the problem list” is perpetuated by these solutions and actually cause more physician queries than those solutions solve.

    Dare I say we are reaping what we have sown in attempting to cut cost by turning providers into coders. Let coders and CDI do what they do best which is code the documentation and query. Let providers do what they do best and evaluate the patient. Attempting to turn providers into coders was never a good idea.

    That is about my .02 for now!

    Thanks, Susan for a great article!

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