Why Risk Adjustment Coding Is Important

ICD-10-CM coding has historically taken a back seat to CPT coding when it comes to professional billing. ICD-10-CM is used for a variety of reasons such as tracking disease process and spread of diseases but most importantly it’s been used to drive medical necessity together CPT paid. With productivity standards in coding and CPTs being the “money” codes, ICD-10-CM has really taken a back seat.  Coders will sometimes neglect guidelines or select codes that are less specific just to cut down on time and meet their productivity standards.

Much of the health care industry is still in the fee-for-service mindset. An example of fee-for-service is a patient that goes in to see their Primary Care Physician for management of chronic conditions and the Physician gets a fixed fee regardless of how well or how poorly that condition is managed. If the patient is compliant and keeps their conditions under control, the provider gets a set fee. If the patient doesn’t understand their management plan and has severe exacerbations that land them in the hospital, that provider still gets their fixed fee for the visit. But now that landscape is starting to change. The CMS quality payment program is starting to adjust fees of providers so that providers with good outcomes get a slightly increased fee while providers with poor outcomes get a slightly decreased fee.



It all comes down to good documentation. Providers need to document appropriately to support the codes they are submitting. Billing a specified, higher severity code but not documenting to that severity (or not documenting at all) can have a huge financial impact. CMS estimates that every year there are hundreds of millions of dollars of over payments to Medicare Advantage plans based on diagnoses that were inappropriately submitted. Through programs like the RADV (Risk Adjustment Data Validation) audits, CMS is looking at potentially huge recoupments from the Advantage plans.

The less money the insurance plans have, the less money they’ll have to reimburse providers. While there may not be an immediate punitive impact on the provider there will be a definite trickledown effect. The Advantage Plans are also beginning to conduct their own “validation” audits on providers and group practices in effort to prevent any recoupments from the RADV audits.

This means that risk adjustment coders are not only needed on the insurance level and the federal level but also on the provider level as well. Medical coders will need to know if the documentation is going to support the requirements and guidelines of external audits. Risk adjustment coders are also needed to validate diagnoses as they pertain to the quality payment programs for CMS.

Audits and adjustments are continuing to rise. Risk adjustment coders who can navigate these complicated policies and master the ICD-10-CM guidelines are in high demand. If you’re interested in obtaining your CRC credential and working in risk adjustment check out the Risk Adjustment Online Course we have available. It utilizes the AAPC curriculum for training medical coders but with the addition of some vital supplemental information, great animations, fun extras, and fantastic resources.