A risk adjustment program aims to close risk gaps which, if left open, result in a patient’s calculated risk score inaccurately representing the patient’s true health status. This type of program is typically driven by an organization such as a health plan or an ACO, whose financial performance depends on the accuracy of patient risk scores. However, such programs often require engagement from physician groups that may not have the same incentives. With multiple organizations involved, program success requires effective leadership within the sponsoring organization, across the executives in the network, and within the participating practices.
Leadership within the sponsoring organization
Risk adjustment programs cut across organizational lines. Even if one business unit owns a traditional chart review program, thinking strategically about risk requires collaboration between clinical, financial, IT, and operational leaders.
Defining Financial Drivers
The chief financial officer (CFO) can play a key role in aligning the leadership team within the sponsoring organization in defining the financial drivers – and costs – of a risk adjustment program.
- Revenue: CFOs have strong visibility into – and ownership of – the organization’s revenue drivers and understand the degree to which a strong risk adjustment program can bolster revenue.
- Investment: Risk adjustment programs are most effective when fueled by aggregated data and analytics. The upfront costs of such an asset can seem overwhelming to smaller organizations, and a CFO can effectively guide a sponsoring organization through the cost/benefit analysis of making an investment in providing tools throughout the network to achieve the desired outcome.
The need for a united leadership team
In addition to the CFO, other leaders have important responsibilities within the sponsoring organization.
- Data is only valuable if the organization can use it effectively. A Chief Medical Officer (CMO) and other clinical leadership can guide the leadership team in planning clinical and operational initiatives that drive risk gap closure at the point of care.
- Chief Information Officers (CIO) and other IT leaders understand the complexities of aggregating data across multiple claims and clinical sources to fuel a risk adjustment program. They can help the rest of the leadership team understand the business value of an investment in a high-quality aggregated data asset, and they can set expectations about the role and importance of data governance.
Together, the leadership team of the sponsoring organization can ensure the risk adjustment program is successfully rolled out across traditional organizational silos.
Leadership across the network
A sponsoring organization – whether a health plan or an ACO– will need to engagement and participation from the organizations within its network or system. The Chief Executive Officer (CEO) of the sponsoring organization plays a key role in working with the CEOs and leadership teams of participating organizations to communicate – and champion – the business case for the program.
Building the business case to engage a provider network may require aligning incentives. A Medicare Advantage plan may be strongly motivated to drive accuracy in risk scores when their primary revenue driver is risk-adjusted premiums; on the other hand, a provider organization reimbursed on a fee-for-service basis, or even under a capitation agreement calculated based on a patient’s age and gender, may not have any incentive to put in the extra work to improve risk documentation.
Mutual distrust may require a neutral third party
Some sponsoring organizations experience challenges or tension when engaging provider network executives. In particular, many a health plan has seen hesitation from providers who have historically been on the opposing side of a negotiating table and worry that a new program is a way to cut reimbursements. While value-based care enables plans and providers to mutually benefit from joint programs, latent mutual distrust can be a barrier to plan-provider collaboration. In such situations, the sponsoring organization may consider bringing in a neutral third party who can establish program governance and a credible source of reporting to gain the trust and engagement of all parties.
Leadership within the practice
Support from the CEO and medical and operational leadership of the practice is critical. The CEO must engage the practice’s leadership team, who in turn are responsible for cascading that engagement down through each level of the organization in order for a risk adjustment program to take hold and drive measurable outcomes and financial results.
Practice leadership teams must also set expectations appropriately. Because the benefits of risk adjustment are typically felt long after the service year, initial enthusiasm can flag after a few months. By enlisting project champions from all parts of the organization, tracking and reporting performance metrics in the context of the program as a marathon rather than a sprint, and reiterating the importance of the work as time passes, the leadership team can ensure the sustainability of the risk adjustment program and positive long-term outcomes.
Implementing a sustainable risk adjustment program can yield significant returns, but requires strong execution in five main areas: leadership, finance, data, analytics, and coaching. This series covers the leadership – organizational and financial – required to initiate a program, the data asset and analytics required to power the program, and the need to operationalize the data asset to drive results.
WEBINAR: BUILD A BETTER 2020 RISK ADJUSTMENT STRATEGY
Thursday, October 10 from 1:00 PM – 2:00 PM Eastern
Risk adjustment is a critical component of any value-based contract – and both health plans and providers need to build effective risk adjustment programs to succeed under value-based care. Plans and providers have typically managed risk adjustment and quality initiatives separately, but a shared understanding and better collaboration can improve the work done on both sides.
Risk adjustment experts Debbie Conboy and Anna Basevich will cover
- Risk adjustment: important for both plans and providers, but in different ways
- Areas of opportunity for providers, from pre-visit planning to population stratification – and for plans, from more accurate chase lists to reduced provider abrasion
- Dangers to watch out for as you build your risk adjustment strategy
- Plan-provider collaboration case studies with broadly applicable lessons, and the effective use of technology and data to support initiatives
You’ll come away from this webinar with new ideas for plan-provider collaboration on risk adjustment and quality as you plan for 2020.