Population Health: What Providers Need to Know About Risk-Adjustment Documentation

By Lisa Eramo  |  July 12, 2017

As more providers shift toward population health management systems and payment models, what are some key considerations when it comes to capturing and documenting accurate information for reimbursement? 

When it comes to accurate population health-based payments, three factors go hand-in-hand: Risk adjustment, documentation, and quality, says Marian J. Wymore, MD, CPC, CRC. Wymore, a California-based physician documentation improvement consultant, spoke recently at HEALTHCON 2017 about how physician documentation directly affects capitated payments. Thorough and specific documentation not only makes good clinical sense, but it also tends to support quality measures and risk-adjusted payments, she adds.

In many risk-adjusted payment models (e.g., Medicare Advantage), physicians receive more appropriate reimbursement only when they correctly document diagnoses that fall into one or more hierarchical condition categories (HCC), says Wymore. HCCs stratify patient risk, allowing payers to predict the costs on which capitated payments are based, she explains.

CMS-HCCs that physicians document in the current year affect their per-member-per-month Medicare payments the following year. Risk adjustment plays an important role not only in Medicare Advantage plan contracts but also in commercial capitated payment arrangements and CMS alternative payment models, such as shared-savings contracts and accountable care organizations.

To ensure appropriate reimbursement, physicians must make time to understand how their documentation specificity for ICD-10 codes translates to risk-adjusted payment methodologies, Wymore says.

Consider these four questions during documentation:

1. Is it possible to be more specific?

Wymore provides the example of obesity vs. morbid obesity. Physicians who document and support the diagnosis of morbid obesity—and include any co-morbidities that are due to obesity—may receive additional risk-adjusted payment. Improving specificity of diagnosis and documentation is also simply good clinical practice, she adds.

Another example is type 2 diabetes mellitus. When patients have diabetic complications, physicians who document these complications as an effect of the diabetes will receive risk-adjustment payment for taking care of a sicker patient.  

In the case of Type 2 diabetes with diabetic chronic kidney disease (CKD), physician documentation must support the diagnosis as well as the stage of CKD. If stage 4, 5, or 6 (end-stage renal disease), physicians may receive an additional HCC and risk-adjusted reimbursement to reflect the anticipated resources necessary to care for a sicker patient, says Wymore.

Documenting ‘dependence on renal dialysis,’ when appropriate, also carries weight in risk-adjusted payment models.

2. What is the acuity or chronicity?

Document all diagnoses and chronic conditions that affect the patient’s current care, current medical-decision making, or current treatment management. Some chronic conditions will risk adjust in perpetuity when documented correctly every year. Examples include:

  • Amputation of a lower extremity
  • Atherosclerosis
  • Chronic viral hepatitis B
  • COPD
  • Drug and alcohol dependencies
  • Heart failure
  • HIV/AIDS
  • Lupus/rheumatoid arthritis
  • Major depression (document episode, severity, and remission status)
  • Some stomas and artificial openings
  • Transplants (except renal)

To receive credit in a risk-adjusted payment model, physicians must not only document these conditions at least once a year but also describe how they assess and treat them, Wymore says.

3. Is the diagnosis due to a coexisting/comorbid condition?

Wymore provides the example of hypertensive heart disease. To receive risk-adjustment credit, physicians must document that the heart failure is due to hypertension. They must also specify the type of heart failure.

4. Does the medical record support the diagnosis?

Resist the temptation to automatically regenerate a problem list or past medical history in a new electronic progress note, Wymore says. Take the time to validate each condition and update the record when additional or more specific diagnoses are made from test results, inpatient visits, specialist consult reports, or other provider visits since the last date of service.

Risk-adjusted payments are ultimately a good thing for physicians. “You get more appropriate reimbursement for your sicker patients,” says Wymore.

Documentation checklist

Providers should document any associated diagnoses or conditions that affect a patient’s current treatment, including the following:

  • Active malignancy
  • All acute and chronic medical conditions (e.g., diabetes, CKD, and CHF)
  • Complications or manifestations
  • HIV or AIDS
  • Infections
  • Injuries or poisonings
  • Mental illness or substance abuse
  • Neurologic, musculoskeletal, vascular, or congenital disorders
  • Pregnancy
  • Severe dermatologic disorder
  • Signs and symptoms (when diagnosis is unknown)

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