Risk Adjustment Overview

Risk adjustment is a methodology used to align payments to health plans based on the demographics (e.g., age and gender) and the health status of enrollees. Under the Affordable Care Act (ACA), the submitted diagnosis code(s) are used to calculate a health plan’s level of risk of high-cost enrollees and required payment transfers between health plans.

Horizon BCBSNJ participates in the following risk adjustment products to stabilize premiums and to protect against the negative effects of adverse risk selection:

• Commercial Individual and Small Group
• Medicaid
• Medicare Advantage

The risk adjustment methodology facilitates health insurance product diversity. This promotes consumer choice and stabilizes premiums and member cost sharing for health care services. The risk adjustment program also encourages timely and annual engagement by clinicians for high-risk enrollees.

The risk adjustment program activities include analyses of claims data to identify members with undiagnosed or unmanaged chronic conditions. In addition to working with doctors and other health care professionals to confirm existing conditions, Horizon BCBSNJ coordinates appropriate Care and Disease Management activities to support doctors, other health care professionals and members. Additionally, the risk adjustment program identifies practice patterns and reduces variations, when clinically appropriate.

Practices that commonly code for all persistent chronic conditions will limit the amount of medical record requests they receive each year. Practices participating in value-based programs, like Patient-Centered Medical Homes or Accountable Care Organizations, will find that documenting and submitting comprehensive and specific coding of conditions helps to validate the health status of their patient populations. It also helps to facilitate tracking and managing of members who have a chronic illness.

The following programs and services are available, at no additional cost, to eligible members:

• Healthy House Calls – available to adult Commercial members, this program includes a health assessment provided in the convenience of the member’s home or at a MinuteClinic® at a nearby CVS/pharmacy^®.
• Care Management Programs – available to adult Commercial and Medicare Advantage members, these programs offer personalized guidance from nurses and dieticians. The counseling is designed to help meet the medical, financial and social needs of our members.

Under the ACA, insurers cannot deny coverage due to existing conditions. The ACA risk adjustment program redistributes funds from plans with low-risk members to plans with high-risk members. This encourages plans to insure all potential enrollees without fear of overwhelming financial loss.

While some provisions of the ACA expire, risk adjustment does not. The program is a key component of the ACA.

If you monitor, evaluate, assess or treat a member for any condition, we ask that you document accordingly and code to the highest level of specificity.

Coding guidelines have always required coding to the highest level of specification. ICD-10 increases the need to document more specifically to ensure that the submitted highly specific diagnosis code(s) are supported by the clinician’s documentation.

All participating doctors and health care professionals that treat Horizon BCBSNJ Commercial, Medicare Advantage or Medicaid members must follow industry standard coding guidelines. Failure to provide comprehensive diagnosis codes may result in requests for medical records.

Yes. It may seem obvious that chronic conditions will persist; however, if a condition is not coded on an annual basis, we cannot assume it is being monitored and managed.

Any data we review from previous claims history is only informational. Per the risk adjustment program guidelines, we can only consider conditions that were coded for services within the calendar year, which is included in the patient’s risk score calculation.

When determining the full health assessment of members, a health plan cannot infer any diagnoses. As per the guidelines, we can only accept encounters that are provided by an acceptable doctor or health care professional (e.g., physicians, physician assistant-certified, certified registered nurse practitioner) for services related to face-to-face encounters with patients.

While medical claims provide much of the information used to determine a member’s health status, the medical record serves as a validation source and provides additional insights into the member’s condition, which may not be found in the claim. Also, reviewing charts on a yearly basis helps us look for ways to improve clinical documentation and stay within certain Centers for Medicare & Medicaid Services guidelines.

No. The charts requested for the risk adjustment program are not used to audit payments.