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View All ProductsBy increasing your healthcare staff's focus on quality and safety with HealthStream, they can help to reduce medical errors and readmission rates.
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View All ProductsIn all areas of resuscitation, from neonatal to elderly care, clinical deterioration is a risk that can be avoided with the help of HealthStream's training programs.
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View All ProductsMake sure your clinicians have the support they need to provide competent care with clinical competency training and development from HealthStream.
View All ProductsHealthStream’s learning management system and comprehensive suite of competency management tools empower your healthcare workforce to deliver the best patient care.
View All ProductsThe suite of healthcare onboarding solutions available from HealthStream aids in nurse retention and improved patient outcomes.
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View All ProductsHealthStream leverages medical professional development in healthcare by providing staff training programs
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Learn MoreThe following blog post is based on an October 2, 2017 article in HFMA Magazine by Donna M. Smith, RHIA and L. Gordon Moore, MD of 3M Health Information Systems.
As hospitals take on more at-risk contracts in the value-based payment era, it is increasingly important that financial officers understand how the health status of contracted populations is calculated in those contracts. Appropriately documenting and coding a patient’s full illness burden is essential to the financial health of hospitals.
Predicting Cost of Care and Stratifying Risk: HCCs
Medicare and Medicare Advantage plans use HCCs (hierarchical condition categories) to quantify the illness burden of each patient and to estimate the annual cost of providing care for that patient. Examples of HCCs are congestive heart failure, COPD, chronic kidney disease, and ischemic or unspecified stroke.
HCCs are weighted using a risk adjustment factor (RAF) based on the complexity of the patient’s disease, along with demographic factors such as age, gender, and patient domicile (living at home or a skilled nursing facility, for example). These RAF scores, similar in theory to a DRG relative weight, are calculated annually based on 12 months of documented diagnostic coding history.
Aggregating scores across a contracted population projects the fixed revenue associated with that population. According to a 3M claims analysis of patient encounters in an integrated delivery system, approximately 80% occur in physician offices and clinics, so HCC capture most often falls to office-based physicians than to physicians providing care in hospitals.
Financial Impact of Under-Coding
When patient conditions do not make it into the EHR, whether due to poor clinical documentation or more than a 12-month gap between patient encounters, the financial impact can be disastrous. If the provider fails to document HCCs or coexisting disease conditions, the RAF score will be lower than it should be, resulting in lower capitated payments.
Consider the example of a 76-year-old patient named Doris who lives at home with her daughter and manages multiple chronic conditions. in 2015, Doris’s primary care physician and cardiologist documented a total of six diagnoses:
When added together with a demographic score and two HCC interaction scores, Doris’s 2015 risk adjustment factor was 2.998. Multiplied by a typical baseline PMPM payment of $800, the individual monthly payment for this patient came to $2398.
By contrast, in 2016, Doris saw her primary care physician only once and did not see her cardiologist. The primary care physician documented three diagnoses:
Doris’s 2016 RAF was 0.901 and the monthly individual patient payment for Doris came to $720.80. In short, the MA plan would be paid $1678 less per month for Doris in 2016 than 2015, amounting to a huge difference in the annual payment of more than $20,000.
Consequences of Errors and Over-Reporting
In contrast, over-reporting HCCs and risk will earn scrutiny by auditors from CMS and other health plans. The most recently reported CMS risk-adjustment data validation audits (based on CY2014 payments) identified $14.4 billion or 8.3% in improper payments to part C supplemental plans.
The 10 HCCs with the highest rate of errors in 2014 were:
CMS audits are here to stay, and it’s only a matter of time before Medicare Advantage plans start conducting their own audits of providers to claw back overpayments. Clearly, clinical documentation improvement (CDI) is essential to financial health in the age of value-based payments. To learn more about CDI resources available from nThrive and HealthStream’s Revenue Cycle solutions, visit https://www.healthstream.com/solution/revenue-cycle/medical-coding.
Reference:
HealthStream’s learning management system and comprehensive suite of competency management tools empower your healthcare workforce to deliver the best patient care.
View All Learning & PerformanceHealthStream offers performance learning management solutions to help develop your healthcare staff into leaders and reduce turnover.
View All ProductsHealthStream works with healthcare organizations to create engaging and high-quality training videos for your staff and management.
View All ProductsImprove care quality and save money by making informed decisions about your healthcare facility and staff with HealthStream's reporting analytics solution.
View All ProductsHealthStream's proven methods for the improvement and overall engagement of your healthcare staff foster a positive workplace and increase retention rates.
View All ProductsThe leadership development program from HealthStream helps mold your high-potential healthcare employees into proven leaders.
View All ProductsWhen you enact HealthStream's quality compliance solutions, you can do so with the confidence your healthcare organization will meet all standards of care.
View All Quality & ComplianceFulfill compliance requirements with a variety of programs and courseware designed to address critical regulatory requirements as well as educate staff to recognize and mitigate risks.
View All ProductsBy increasing your healthcare staff's focus on quality and safety with HealthStream, they can help to reduce medical errors and readmission rates.
View All ProductsLearn about what HealthStream's healthcare policy management software and how it can help aid your organization efforts.
View All ProductsHealthStream's education helps address diversity, equity, and inclusion within your organization, as well as promoting health equity in the communities you serve.
View All ProductsHealthStream offers professional training and education on how to best optimize your reimbursement process within your healthcare organization.
View All ReimbursementTeach your healthcare staff about the revenue cycle and claim management through targeted training and video tools from HealthStream.
View All ProductsLearn about our advanced resuscitation training solutions. Our solutions are designed to help improve patient outcomes.
View All ResuscitationIn all areas of resuscitation, from neonatal to elderly care, clinical deterioration is a risk that can be avoided with the help of HealthStream's training programs.
View All ProductsHealthStream's EMS Program offers a comprehensive, CAPCE accredited EMS course library that meets National Registry annual recertification.
View All ProductsNurture the skills of your nurses and medical staff to help mold them into effective leaders with development training from HealthStream.
View All ProductsExpand the decision-making skills and effectiveness of your healthcare workforce with HealthStream's clinical development programs and services.
View All Clinical DevelopmentMake sure your clinicians have the support they need to provide competent care with clinical competency training and development from HealthStream.
View All ProductsHealthStream’s learning management system and comprehensive suite of competency management tools empower your healthcare workforce to deliver the best patient care.
View All ProductsThe suite of healthcare onboarding solutions available from HealthStream aids in nurse retention and improved patient outcomes.
View All ProductsGive your healthcare staff the decision support and skills training they need with the online products available from HealthStream.
View All ProductsHealthStream leverages medical professional development in healthcare by providing staff training programs
View All ProductsLearn more about HealthStream's Provider Credentialing, privileging, & enrollment solutions.
View All CredentialingExperience standardized and centralized healthcare credentialing, privileging, and enrollment that is smarter and faster than ever before.
View All ProductsAutomated, web-based provider credentialing and enrollment software for growing medical groups.
View All ProductsNCQA-certified CVO verification services for initial and re-credentialing files in an overflow or full-service capacity for healthcare organizations.
View All ProductsSearch, review, and add providers into the Epic provider master file with our Epic app integration, Provider Validate.
View All ProductsMake sure your healthcare staff can schedule out appointments and work schedules with ease using HealthStream's line of software solutions.
View All SchedulingHealthcare scheduling software designed to optimize staffing requirements & elevate patient care
View All ProductsPrecisely align staffing and needed resources to enable efficient patient flow and high-quality, cost-effective patient care.
View All ProductsHealthStream’s free nurse schedule app, NurseGrid™, is built to help you care for your staff and engage with their specific needs.
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