RADV Audits: Are Your Coding Practices Helping or Hurting?

Marilyn Garry
March 16, 2017

Data submissions for risk adjustment have been around for many years. So too have audits of those submissions. For example, the Centers for Medicare & Medicaid Services (CMS) selects a certain number of Medicare Advantage (MA) and Medicare Shared Savings Program (MSSP) ACO contracts to undergo Risk Adjustment Data Validation (RADV) audits. RADV audits have two main purposes: one, to ensure contracts have met CMS’ submission requirements, and two, to validate HCC codes by ensuring the submitted diagnoses are supported by medical documentation. A mistake in either one of these areas can have severe financial consequences for insurers, so there’s one key question you want to ask yourself: Are you prepared for what the RADV has in store for you?

Coming Soon: An Increase in RADV Audits

In 2014, the U.S. Government Accountability Office (GAO) conducted a study of CMS’ efforts to address improper payments in the MA program, which were estimated at about $14.1 billion in 2013. In April 2016, GAO released its report, called “Fundamental Improvements Needed in CMS’s Effort to Recover Substantial Amounts of Improper Payments,” outlining the findings. The report reveals the need for improvements to strengthen the quality outcomes of RADV audits as related to improper payment recoveries. It recommends five ways for CMS to improve its selection and payment recovery processes, and since the Department of Health & Human Services (HHS) agrees with the recommendations, there’s a good chance that not only will CMS start auditing more contracts, but the audits will also have an even more intense focus on payment recovery.

To mitigate the potentially costly impact of an RADV audit, my advice for MA health plans that have coders abstracting from medical records is simple: Make sure they are properly trained and they know why they are coding the way they do.

How to Be RADV Audit Ready

Most of the common mistakes coders make in the abstraction process happen because they don’t know all the idiosyncrasies that apply to the abstraction. Auditors heavily scrutinize coding rules; health plans can better ensure compliant coding by providing coders with the tools they need to code accurately and efficiently and by making sure their coders understand and master all relevant HCC coding guidelines:

  • Inpatient vs. Outpatient Coding Rules – The guidelines governing each type of coding are very different. For example, inpatient coding requires diagnoses that are documented at the patient’s time of discharge as “ruled out,” “suspected” or “possible” to be coded and documented as an existing condition. In outpatient coding, conditions with those qualifiers are not allowed to be coded.
  • Acceptable Provider Types – CMS is specific about the types of providers it will accept as diagnosis sources for HCC coding. It’s crucial that coders are only capturing codes from covered providers
  • Acceptable Facility Types – As with provider types, CMS only accepts diagnosis codes from certain types of facilities. They will, for example, accept diagnoses from Critical Access Hospitals and Children’s Hospitals, but not from Skilled Nursing Facilities.
  • “History of” Rules – Coders must understand when and how these codes can and can’t be reported.
  • Dealing with Past Medical History or Problem Lists – CMS requires these to be assessed at least once per calendar year during a encounter with the patient. In my experience, understanding what to do with these is the biggest challenge for all coders. They can avoid mistakes by finding out how the client/customer prefers this information to be captured.
Marilyn Garry, RN, BSHA/HM, CPC, CRC, BLS, ACLS, is Senior Director of Risk Adjustment & Quality at Talix.
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