In light of federal lawsuits, physician practices need to get smart about risk adjustment coding

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Physicians should watch the outcome of lawsuits brought against UnitedHealth.

A federal lawsuit has focused attention on how the industry uses medical codes for risk adjustment.

While the lawsuit doesn’t involve physician practices, it’s a heads-up for them to pay attention to risk adjustment coding, according to Neurology Today.

The Department of Justice recently joined lawsuits that claim UnitedHealth, the country’s largest Medicare Advantage insurer, fraudulently inflated its MA risk scores to maximize reimbursement. The lawsuits accuse the insurer of conducting biased retrospective reviews of medical records aimed at boosting its MA reimbursement.

In the MA program, higher risk scores—which are calculated by the level of services each beneficiary requires—mean greater payments from the government, creating an incentive for plans to upcode.

The government contends that MA plans overcharge the Centers for Medicare and Medicaid Services after reviewing physicians’ medical records and determining that medical codes that yield higher payments are justified. UnitedHealth has denied the allegations.

Physicians should watch for the outcome of the lawsuits and know that as value-based payment systems continue to expand, the codes will influence insurance contracting opportunities and physician pay, the publication says.

In MA plans, high-cost patients are identified if a healthcare provider selects a specific set of ICD-10 codes called Hierarchical Condition Categories (HCC) codes. Those codes take on increasing importance as public and private payers move to value-based payment models, according to Eric Cheng, M.D., a neurologist and researcher at the David Geffen School of Medicine at the University of California, Los Angeles.

Physicians can use medical codes to generate a high-risk score and earn more money for taking care of complicated patients. But they must make proper use of HCC codes, which indicate expected costs for a patient, as the lawsuits are a clear indication the DOJ is focusing in on risk adjustment practices.

The findings from one recent study suggest that as value-based payment programs continue to increase in size and scope, practices that serve high-risk patients may be at particular risk of getting hit with financial penalties.