Medicare Advantage Plans Can See Massive Gains in Risk Adjustment by Focusing on Kidney Disease

Author : Strive Health

By Jon Collins, Head of Data Strategy & Analytics, and TJ Malman, Director of Corporate Strategy

Any experienced Medicare Advantage (MA) plan leader understands the importance of the Hierarchical Condition Category (HCC) risk adjustment model and its benefits for delivering care and ensuring appropriate reimbursement for complex patient populations.

The HCC model assigns a risk adjustment factor to each Medicare patient as a measurement of predicted future costs. This risk score is then used to adjust capitation payments for beneficiaries enrolled in an MA plan, which means the accuracy of HCC coding can significantly impact the plan’s financial viability and care delivery. By appropriately assessing and clinically documenting patient complexity, MA plans are eligible for greater CMS revenue that can be reinvested to better meet the needs of their patient population.

Given the importance, most health plans employ or outsource teams that focus exclusively on patient health assessment, documentation, and accurate coding. But as health plans shift from one-size-fits-all to portfolios of discrete solutions for high-value subspecialty populations, many MA plans are now considering a more specialized, disease-specific approach for risk adjustment as well. “Many payors have hired vendors to support their general health assessment and coding capabilities. However, experience shows that these programs do not have the disease-specific knowledge required to make the desired impact on chronic conditions,” said Tim Burke, Chief Compliance Officer of a large, multi-state physician specialty practice and former National VP of Risk Adjustment and Coding at HealthCare Partners.

HCC Coding Accuracy For Kidney Disease is a Multi-Million-Dollar Opportunity

Strive Health works with MA plans of all sizes to appropriately model, plan, and deliver accurate HCC coding for their kidney disease populations. “We find that nearly all MA plans we engage with can sizably benefit from a specialized health assessment and coding solution for kidney disease patients. In most of our engagements, the potential remains relatively untapped, and CMS policy changes are only increasing the stakes,” said Bob Badal, Strive’s Chief Revenue Officer.

There are several reasons why kidney disease should be at the top of the priority list for any MA plan leader looking to drive significant performance improvement:

Recent CMS Changes Can Increase the Addressable Population Over 5x

The kidney disease population consists of beneficiaries with Chronic Kidney Disease (CKD) and End Stage Renal Disease (ESRD). CKD refers to five stages of chronic kidney damage, from very mild damage in stage 1 to complete kidney failure in stage 5. ESRD is an advanced state of CKD in which beneficiaries require ongoing dialysis or a kidney transplant to stay alive.

Both CKD and ESRD populations represent a large and disproportionate share of MA medical spend. Whereas ESRD beneficiaries represent only 0.65% of MA enrollees, they make up about 5% of all MA spend, and per-member-per-year spend for CKD beneficiaries is roughly double the average.

In addition to high costs, the addressable opportunity related to kidney disease beneficiaries is growing significantly due to recent policy changes. The 21st Century Cures Act introduces the ability for ESRD beneficiaries to enroll in MA plans, regardless of previous coverage, beginning in open enrollment for 2021. As a result, ESRD enrollment and spend could jump over 3x for MA plans in the near term.

CMS also recently reintroduced CKD stage 3 as an HCC code (HCC 138) that factors into risk adjustment, which increases the stakes of accurately coding for this condition. Below is a graph illustrating how the reintroduction of adjustment for CKD stage 3, along with general CKD population growth, is creating a massive influx in the addressable population for MA risk adjustment.

50% of CKD Is Undiagnosed, Even More Underdiagnosed

While the prevalence of diagnosed CKD beneficiaries is high, nearly 50% of all CKD cases remain undiagnosed. The diagnosis of CKD and identification of a specific stage is based on the beneficiary’s Glomerular Filtration Rate (GFR). Calculating GFR requires a provider to assess several variables including age, race, gender, and multiple lab results. Appropriate CKD diagnosis can be significantly held back by the relative complexity of the GFR calculation, the challenge of synthesizing data inputs across multiple sources, and physicians needing more education on how to perform the calculation.

Undiagnosed and underdiagnosed CKD has a meaningful impact on appropriate patient care and premium payment for MA plans. Strive developed a Kidney Disease HCC Coding Simulation ToolTM to demonstrate the impact of coding accuracy among kidney disease populations. Using this tool, we can illustrate the impact of undiagnosed and underdiagnosed CKD through two case examples. [Enter your email address to get our proprietary Kidney Disease HCC Coding Simulation ToolTM]

Example 1: An MA plan has a member who is Community-Based, NonDual, and Aged. The member has CKD Stage 3, but the CKD has not been diagnosed and coded. In this case, the appropriate coding would result in a 6.9% increase in the risk adjustment factor.

Example 2: An MA plan has a member who is Community-Based, FB Dual, and Aged. The member has CKD Stage 4, but the CKD has been inappropriately diagnosed and coded as CKD Stage 3. In this case, the appropriate coding would result in a 24.3% increase in the risk adjustment factor.

Strive’s Kidney Disease HCC Coding Simulation ToolTM can also be applied at the population level to size the impact of appropriate coding for an MA plan overall. [Enter your email address to get our proprietary Kidney Disease HCC Coding Simulation ToolTM] “Initial analysis of a typical MA plan population, coupled with Strive’s experience identifying greater than 20% increases in appropriate CKD diagnosis, demonstrates that MA plans can realize incremental revenue in the millions of dollars through accurate CKD coding alone,” said Badal.

Your Playbook For Improving HCC Coding Accuracy in Kidney Disease Populations

Kidney disease represents a large, growing, and complex population, and it is an obvious place for MA plan leaders to look for specialized, disease-specific solutions for coding accuracy. But how can MA plans address the significant challenges that kidney disease presents for risk adjustment? Strive’s work with MA plans suggests that coding accuracy improvements for kidney disease beneficiaries can be meaningfully achieved by following three steps.

Step 1: Understand How Policy Changes Unique to Kidney Disease Will Impact Risk Adjustment

The 21st Century Cures Act, the reintroduction of HCC 138 into the risk adjustment equation, and other recent policy changes will meaningfully alter MA risk adjustment efforts. To navigate the changes effectively, MA leaders must understand these policies on a nuanced and granular level and work with their actuarial teams to appropriately incorporate them into their economic modeling.

Strive offers custom opportunity assessments that help MA plans size and scope how policy changes for kidney disease populations will change their businesses. The more deeply health plans understand the changes, the more readily they can stay ahead of the curve.

Step 2: Use Data Analytics to Improve Coding for Kidney Disease Beneficiaries

The complexity of kidney disease populations leads to challenges with complete health assessment and coding accuracy. MA plans must ensure they can readily access and analyze claims, labs, and encounter data in order to identify undiagnosed and underdiagnosed CKD and comorbid conditions.

MA plans that optimize their data and analytics can enable better documentation of care for patients with kidney disease, leading to more accurate HCC risk adjustment coding and more appropriate compensation for quality care. “Purpose-built artificial intelligence and machine learning models that are highly specialized ensure that the complexities like CKD and ESRD patients are properly assessed and documented each year,” said Burke.

In Strive’s work with MA plans, we integrate disparate datasets and run massive amounts of data through a proprietary predictive data analytics engine that is purpose-built for kidney disease. For a typical MA plan, we can identify a >20% increase in appropriate CKD diagnosis, which results in significantly increased MA revenue and improved patient outcomes.

Step 3: More Closely Integrate With Kidney Care Providers

CMS methodology for determining risk adjustment will continue to utilize a higher amount of provider data and deemphasize the importance of payor claims data. Therefore, it is important for MA plans to partner and integrate with care providers who directly manage their kidney disease beneficiaries.

Kidney disease is often treated by primary care physicians and/or nephrologists. Depending on the profile of comorbidities, there may also be several other specialists in the mix. HCC coding is not always intuitive for physicians – particularly in complex patient populations – so physicians typically require hands-on resources and decision support.

Strive deploys on-the-ground care teams that work within the local provider landscape to ensure appropriate care and coding for health plans. Through close integration with local providers, our on-the-ground teams bridge the gap between appropriate diagnosis and care and more accurate coding for kidney disease beneficiaries.

Getting Started

Health plans are shifting their strategies from one-size-fits-all to specialized, disease-specific solutions for risk adjustment, and MA plans can significantly benefit from a specialized coding accuracy solution for kidney disease patients. As recent CMS policy changes take hold, deploying specialized solutions for kidney disease will become an even more urgent priority. MA plans can address the significant challenges that kidney disease presents for risk adjustment through a carefully designed plan.

Strive works with MA plans of all sizes to appropriately model, direct, and deliver accurate HCC coding for their kidney disease populations. In many cases, we support health plans in identifying and capturing multi-million-dollar improvements from coding accuracy.

To start evaluating the opportunity of improved coding accuracy for your kidney disease population, email us at or enter your email address to get our proprietary Kidney Disease HCC Coding Simulation ToolTM.

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