New Rule Helps Medicare ACOs During COVID-19 Pandemic

The Centers for Medicare and Medicaid Services has released an interim final rule to remove spending associated with COVID-19 patients from performance calculations for the Medicare Shared Savings Program.

The Medicare Payment Advisory Commission, an independent congressional agency established to advise the U.S. Congress on issues affecting the Medicare program, had recommended that CMS modify its incentives around the COVID-19 situation.

This is good news for value-based payment models, such as accountable care organizations (ACOs), that incentivizes physicians, hospitals, and all healthcare providers to work in a more coordinated manner. When an ACO succeeds both in delivering high-quality care and spending healthcare dollars more wisely, it may share in any savings it achieves for the Medicare program.

Excerpt from

Because the impact of the pandemic varies across the country, CMS is making adjustments to the financial methodology to account for COVID-19 costs so that ACOs will be treated equitably regardless of the extent to which their patient populations are affected by the pandemic. CMS is also forgoing the annual application cycle for 2021 and giving ACOs whose participation is set to end this year the option to extend for another year. ACOs that are required to increase their financial risk over the course of their current agreement period in the program will have the option to maintain their current risk level for next year, instead of being advanced automatically to the next risk level.

One common element in many value-based programs is risk adjustment using Hierarchical Condition Categories (HCCs) to create a Risk Adjustment Factor (RAF) score. This method ranks diagnoses into categories that represent conditions with similar cost patterns. Higher categories represent higher predicted healthcare costs.

Top 10 Most Over Documented HCCs:

  • Conditions that have been surgically corrected (e.g., abdominal aortic aneurism)
  • Diabetes with complications
  • Malnutrition
  • Nephritis
  • Pathological fractures (e.g., old pathological fractures reported as current)
  • Pneumococcal pneumonia (e.g., unspecified pneumonia reported as pneumococcal)
  • Polyneuropathy (e.g., reported as current when no treatment, evaluation, or monitoring is documented)
  • Primary site cancers (e.g., indicating historical conditions as current)
  • Strokes (e.g., indicating acute stroke instead of late effect of stroke)
  • Vascular disease (e.g., reported as current when no treatment, evaluation or monitoring is documented)

Top 10 Most Under Documented HCCs

  • Amputations
  • Artificial openings
  • Asthma and pulmonary disease
  • Chronic skin ulcer
  • Congestive heart failure
  • Drug dependence
  • Metastatic cancers
  • Morbid obesity
  • Rheumatoid arthritis
  • Specific type of major depressive disorder

Coders should familiarize themselves with the HCC payment plan as well as other risk adjusted models. Following Medicare guidelines for documenting and coding chronic conditions can not only enhance quality of care, but will also result in optimal reimbursement.

Partnering with an experienced coding consulting company can produce measurable improvements. You can expect better documentation and increased coding compliance, thus improving financial and quality indicator performance. This is the foundation for assuring overall readiness for new value- based reimbursement models.

The information contained in this post is valid at the time of posting. Viewers are encouraged to research subsequent official guidance in the areas associated with the topic as they can change rapidly.

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