Exploring Critical Business and Legal Issues across the Healthcare and Life Sciences Industries
Exploring Critical Business and Legal Issues across the Healthcare and Life Sciences Industries

Top Takeaways | Risk-Adjustment Roulette: Strategies for Navigating the Shifting Landscape

By on October 24, 2023
Posted In Uncategorized

McDermott Will & Emery Partner Ankur Goel moderated a panel during the Value-Based Care Symposium that focused on the risk-adjustment landscape and provided insights into how the regulatory environment and contractual partnerships may continue to shift in the coming years. The panelists shared their experiences navigating the current enforcement environment and the corresponding impact on value-based care and investment opportunities.

Session panelists included:

  • Jeffrey De Los Reyes, Managing Director, Alvarez & Marsal, Healthcare Industry Group
  • Wayne T. Gibson, Senior Managing Director, FTI Consulting
  • Kanika Sabor, Managing Director, Healthcare Disputes and Economics, Ankura Consulting
  • Timothy J. Wilder, FSA, MAAA, Principal and Consulting Actuary, Milliman

Top takeaways included:

  1. Increased complexity of RADV audits. The methodologies for risk adjustment data validation (RADV) audits are more complex and have a broader reach than before, impacting how sampling is approached and how extrapolation is allocated back to providers by Medicare Advantage (MA) plans. The recent changes apply to US Centers for Medicare & Medicaid Services (CMS) and Department of Health and Human Services (HHS) Office of Inspector General (OIG) RADV audits, which means the potential financial risk is higher. Providers and Medicare Advantage organizations must analyze the potential impact of these changes and become better prepared to respond to these audits.
  2. Greater collaboration between payors and providers. The changes brought about by the RADV audits will likely encourage more collaboration between payors and providers, as both parties will need to be more knowledgeable about what goes into their payments. Payors may also have to perform more audits to reduce exposure, with involvement of the providers becoming the norm.
  3. Increased scrutiny on third-party vendors and providers. There will be greater scrutiny on third-party vendors, with many needing to change their processes based on stricter rules. The risk of enforcement actions under the False Claims Act is evolving, from targeting plans to targeting providers and third parties. Currently, the entire ecosystem has risks and everyone needs to be aware of the potential impact of these new changes.
  4. Impact of the new risk-adjustment model. The new model will force adjustments in how entities operate in the risk-adjustment space. It is expected to shift the focus from coding to more concentrated samples and adherence to compliance, ensuring that things are done mindfully. This may lead to less emphasis on chart reviews and a greater focus on prospective strategies, provider education, and collaboration between payors and providers.
  5. Continued growth and challenges in value-based care (VBC). Despite changes in the risk-adjustment landscape, VBC remains a viable investment and a fundamental approach for aligning payers and providers. However, the adjustments may prolong the investment period and require more coordination and strategic planning. As MA grows in popularity, organizations must adapt to the new rules and ensure that their strategies align with the evolving risk-adjustment environment.




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