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Data Science

So Long Chart Audits

May 24, 2017
Advanced analytics with clinical integration allows health plans to replace chart audits with technology.
President and CEO

This article originally appeared in Healthcare Finance News

Ask most payer executives about chart audits, and you are certain to hear a collective groan. They are labor- and resource-intensive, quite expensive and a significant pain point for network physicians. And it’s seemingly become an annual event with no end in sight. Until now.

Advanced analytics with clinical integration offers health plans and their participating providers the ability to use technology to replace chart audits.

As payers know, chart audits have served an important function. Payers do them – and physicians reluctantly participate – because significant revenue is at stake. Member health is too.

In short, payers contract with companies that send nurses and medical examiners to visit participating provider offices and review member charts. The nurses are looking for opportunities to increase the payer’s quality scores and revenue – and the provider’s quality and revenue too – by closing care gaps that are connected to HEDIS® measures and Medicare Star ratings, and improving the documentation of the complexity of a member’s care. This reflection of complexity is known as the Hierarchical Condition Category (HCC) model, which includes a Risk Adjustment Factor (RAF).

The easiest way to understand the implications for accurate coding is by example: George, a 66-year-old male enrolled in a Medicare Advantage plan.

George’s demographic information yielded a risk score of 0.288 and reimbursement to the payer of $12,880. Together, his risk score totaled 1.55 for a payment of $15,500. George was diagnosed with heart failure in the previous year, but since it was under control, the physician did not document it in the current year medical record (or did not document it properly). Therefore, the code could not be maintained, reducing George’s risk score by 0.368 or $3,680.

So Long Chart  Audits

By appropriately adding condition severity, complications and co-morbidity diagnoses that apply for George (mild depression, diabetic neuropathy and diabetes mellitus/heart failure interaction), his risk score increased by 0.762 or $7,620. In total, accurate coding led to a payment of $26,800 for George’s healthcare, an increase of $11,300, all by just accurately representing the complexity of George’s health.

Estimates suggest proper coding would lead to a gain of approximately $2,000 per Medicare Advantage member per year.

From a member health perspective, complete coding and proper reimbursement give payers and providers the resources to provide appropriate services. It also means members with complex or chronic conditions like George are prioritized for additional services such as disease management programs or the assignment of a payer care coordinator to work with him to prevent avoidable emergency department visits or hospitalizations.

It may be tempting to think of George as an extreme example, but we know more than 25 percent of Medicare beneficiaries have diabetes, and diabetics frequently have co-morbidities:

  • 71 percent of diabetics have hypertension
  • 65 percent have abnormally elevated cholesterol or fats (lipids) in the blood (dyslipidemia)
  • 28.5 percent have retina disease that results in impairment or loss of vision (retinopathy)
  • 44 percent of kidney failures are due to diabetes
  • Heart attacks are 1.8 times higher in the diabetic population
  • Strokes are 1.5 times higher among diabetics
  • Cardiovascular disease is 1.7 times higher
  • 60 percent of limb amputations are performed on diabetics

This example illustrates the financial and population health upside of proper coding, but also the inherent complexity to complete coding for the more than 17 million Medicare Advantage members. This increasing administrative burden typically falls to physicians and their staff, supplemented by payer chart audits, which together contribute to increasing levels of physician frustration and burnout.

Advanced analytics with clinical integration is the solution for payers and their provider networks.

The most robust advanced analytics platforms integrate 25 or more sources of member information, including clinical data, demographics and psychographics to create a 360-degree view of each member. Just as importantly, payers and providers need to work in the same analytics platform and seamlessly share timely information about members, and the information must be integrated into the physician’s existing workflow – all of which is now possible.

The integration of clinical and claims information coupled with analytics and sophisticated algorithms leads to the discovery of codes that existed in the previous year, but not the current one, such as George’s heart failure. The platform then prompts the provider to add this information. Similarly, advanced analytics tools proactively identify members at risk for developing a range of medical conditions as well as produce suspect codes for frequent co-morbidities like George’s mild depression and diabetic neuropathy.

These inherent capabilities of the most robust analytics platforms also lead to better performance on HEDIS® measures and an increase in Medicare Star ratings. The continuous, year-round monitoring in a tool shared by the payer and participating providers means members are constantly identified and prioritized for critical preventive services. This continuous process eliminates the end-of-the-year scramble, reduces costs, and increases satisfaction for the payer, providers and members.

Present payer executives with advanced analytics with clinical integration to replace chart audits, and instead of a groan, I believe we will hear a collective sigh of relief.