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Taking the risk out of risk adjustment: Managing exposure for ACOs

Andrea D. Kelly ( is Compliance Manager and Heidi Lopez ( is Director, Business Practices, at Houston Methodist in Houston, TX.

The Medicare Shared Savings Program (MSSP) has provided increased opportunity for providers opting into accountable care organizations (ACOs) to derive additional income for closely monitoring and coordinating the care of Medicare beneficiaries. In maintaining high-quality standards while controlling and reducing costs, ACOs and their member providers are in a position to share in any savings realized by the Medicare program.

But beyond meeting quality standards and reducing the Centers for Medicare & Medicaid Services’ (CMS) cost per beneficiary, ACOs can also maximize their earnings under the MSSP by ensuring their providers thoroughly detail each beneficiary’s medical conditions and diagnoses with coding and documentation in order to affect the individual patient’s risk adjustment factor (RAF). An increased RAF results in a corresponding increase in the amount CMS will anticipate allocating for the beneficiary in the following program year. By widening the gap between CMS’ anticipated spend and actual spend per beneficiary, ACOs stand to gain additional savings for their participation in this alternative payment model.

Given this incentive to build up the RAF score for each patient, compliance professionals should take note of recent enforcement actions and recognize the need for diligence in this emerging risk area.

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