FAQ: 10 Things You Need to Know about Risk Adjustment

FAQ: 10 Things You Need to Know about Risk Adjustment

Providers who hire Certified Risk Adjustment Coders (CRCs™) have nothing to fear.

The risk adjustment methodology is a relatively new payment model that is prospective in nature — meaning that healthcare costs in future years are based on what is known to be true of healthcare costs in recent years. Providers that hire CRCs™ have the advantage in this new culture, as these professionals understand risk adjustment and its inherent challenges. The following 10 frequently asked questions (FAQs) shed more light on the subject.

FAQ No. 1

Evaluation and Management – CEMC

Isn’t risk adjustment just like fee-for-service (FFS), except it focuses on diagnosis codes instead of CPT® codes?

A: Risk adjustment cannot be compared to FFS rules for several reasons, one being that the qualifications for diagnosis submission are not the same. In the FFS world, diagnoses are typically submitted when they have “MEAT” (monitor, evaluate, assess, or treat) — a concept that only applies when choosing an evaluation and management (E/M) level of service. You cannot bump up a level of service with additional diagnoses unless those diagnoses are addressed at that visit. ICD guidelines, however, have always instructed us to code for all coexisting comorbidities, and especially those that are a part of medical decision-making (MDM). You cannot allow diagnoses not addressed or treated to influence selection of E/M service codes.

FAQ No. 2

What spurred AAPC to create the CRC™ credential?

A: Years ago, I spoke with AAPC about the need for a credential or platform for risk adjustment coders. I was not alone: Others had even pitched a curriculum or program. Many of these were education ideas centered on hierarchical condition categories (HCC), but there has never been a credential based on a singular payment methodology. What should have been pitched was a curriculum that includes all forms of risk adjustment (including population health management), instead of focusing on payments. The CRC credential eventually was created out of demand from coders and risk adjustment professionals.

FAQ No. 3

What is the difference between AAPC’s CRC™ curriculum developed in 2015 and the new curriculum?

A: The curriculum developed in 2015 was created for coders who already had a core coding credential. The curriculum focused on risk adjustment, only, and did not cover basics, such as the business of medicine, anatomy and physiology, complete ICD coding guidelines, etc. Risk adjustment was in full swing for Medicaid and Medicare plans, but the risk adjustment model for the U.S Department of Health & Human Services (HHS) was still being developed. The 2016 CRC™ curriculum is designed as a standalone credential. In addition to the fundamentals, the curriculum includes current information for the HHS model, as well as annual updates.

FAQ No. 4

How can I best prepare for the CRC™ exam, and who made this exam?

A: The best way to prepare for an AAPC exam is to take the related AAPC course.

The CRC™ exam committee is comprised of risk adjustment professionals from across the country. The exam questions are based on what you should know to properly code for risk adjustment. This includes the basics of risk adjustment, proper ICD code selection, how to handle documentation challenges, as well as predictive modeling, quality, and basic financial ties of risk adjustment in healthcare.

FAQ No. 5

Why are there differing instructions for risk adjustment coding, and which instructions are correct?

A: There are differing instructions for many reasons: Some organizations feel more comfortable only allowing diagnoses that were managed or addressed in the encounter. Although there have been Risk Adjustment Data Validation (RADV) audits by the Centers for Medicare & Medicaid Services (CMS) that have approved all current diagnoses, there have also been Office of Inspector General audits conducted by auditors who are not trained in risk adjustment and who applied FFS rules to risk adjustment audits.

The correct methodology for risk adjustment coding is to code for all current diagnoses. The diagnosis does not need to be treated, managed, or addressed; it merely has to be an ongoing chronic condition noted by the treating provider or part of MDM. For example: “I had to consider the patient has diabetes when treating this other condition,” or “I had to consider this patient has cancer, even though I am not personally treating the cancer myself,” etc.

The purpose of collecting all current diagnoses for each year is to account for the correct financial needs of patients in the following year. Leaving out factual diagnoses harms the health plans and, ultimately, the patients. The idea is that if a patient really has a condition, then it will be addressed at some point in the year in a face-to-face visit. (This is not necessarily true for “status of” codes and other conditions that are persistent and known, but not regularly treated.)

FAQ No. 6

How do I handle lists found in documentation such as a past medical history (PMH) only list?

A: The problem with lists in medical record documentation is that there can be so many variations from one provider to another. CMS knows that providers make mistakes — such as mixing both old and current diagnoses in a list titled PMH, or listing old conditions under the “Active” or “Current” header. Errors like these make clinical documentation challenging to code properly.

I created a new acronym, TAMPER™ (Treatment, Assessment, Monitor or Medicate, Plan, Evaluate, or Referral) for lists. This acronym is officially trademarked through the U.S. Patent and Trademark Office by ionHealthcare®. The purpose of TAMPER™ is not to be a competitor for the MEAT concept; this acronym was made for coders evaluating various lists, such as PMH, Active, Current, Ongoing, etc.

Note that when medications are used to support a current diagnosis, it’s important for the medication list to be current and for the medication to be used to treat only that condition. If you feel uncertain about a diagnosis presented in a list, you can easily apply the TAMPER™ concept by asking yourself, “Did the provider TAMPER™ with the diagnosis?” If the answer is yes, then you can code it from the list as a current diagnosis.

TAMPER™ Decision Flow:

Pasted Graphic.pdf

FAQ No. 7

Can you tell me more about job opportunities and the cycle of risk adjustment work?

A: There are many risk adjustment vendors and organizations across the country and overseas. Many hire remote coders. Some pay by the hour, and others by the chart. Some offer good 1099 contractor opportunities, where you can work from home without worrying about business insurance, obtaining clients/contracts, information technology issues, etc., which allows you to focus on your job. Regardless of the vendor, all risk adjustment activities occur at the same time every year. Typically, risk adjustment chart review for CMS is completed in June through the following January of each year. Commercial risk adjustment review activities typically run all year. In risk adjustment, all organizations are busy at the same time. Whenever there are lulls in work, there are industry-wide lulls.

FAQ No. 8

What exactly is RADV and what are the differences of CMS RADV and HHS RADV?

A: There are two main types of RADV for CMS:

  • Random CMS RADV uses a selection process in which a Medicare Advantage (MA) plan is randomly selected for an audit.
  • Targeted CMS RADV is applied to MA plans who have raised red flags, such as a large increase in risk scores, etc.

Both random and targeted CMS RADVs use a “stratified sample:” a random sample of 1/3 of patients with high risk scores, 1/3 of patients with medium risk scores, and 1/3 of low risk scores. The focus is not proving the ICD code, but rather proving the validity of the HCC value that was paid to the health plan by CMS for the reported ICD code. Any ICD code supporting the HCC (or higher HCC value) is acceptable.

HHS RADV is similar to CMS RADV, but stratifies its sampling among adult, child, and infant patients, and by metal levels (silver, gold, platinum) offered through the commercial health plans.

CMS RADV allows any face-to-face encounter that supports the HCC value for a date of service within the calendar year. HHS RADV requires the face-to-face encounter to be reported through the claims EDGE server. CMS recently stated it also allows for non-EDGE claims, as long as the encounter meets all of the same criteria of a face-to-face encounter.

CMS RADV is typically performed on data from three years prior, whereas HHS RADV is performed on the prior year’s data.

CMS RADV affects payments made to a health plan and may require reimbursement to CMS. HHS RADV affects allowable funding for each health plan based on reported conditions. Health plans with lower-cost patients (by risk/HCC value) may have to pay back into the system to cover health plans with higher-cost patients (by risk/HCC value).

For more on RADV, see the article “RADV Reality” on page 28 in this issue of Healthcare Business Monthly.

FAQ No. 9

Why do some companies code offshore in risk adjustment?

A: Some organizations will not offshore coding work because it is derived from U.S. government-based programs. Organizations who do offshore usually do so because coding services are less costly than in the United States. HIPAA does not apply overseas. Anyone considering offshoring risk adjustment work should include all requirements of HIPAA in their contractual agreements, and perform a mock breach process to ensure the ability to track disclosures and medical record security.

Some organizations market themselves as “approved by HIPAA,” but there is no such designation. They may have had a third party assess their security, but the covered entity is ultimately responsible for the security of their records.

Some U.S.-based companies have only administrative offices onshore, while the actual work is offshored. Several coding companies based in other countries focus on marketing risk adjustment coding services. U.S.-based companies can vary, as well: Some specialize in medical record retrieval, some in analytics, and others in population health management. Very few specialize primarily in coding.

FAQ No. 10

What are some of the important changes to risk adjustment with ICD-10-CM?

A: Risk adjustment models change each year (January-December); while ICD codes change each Oct. 1. When assigning codes, remember that there may be new codes issued in October that are not yet added to risk adjustment models.

Most conditions that risk adjust are chronic, life-long illnesses. ICD-10-CM includes many new combination codes that may best describe two or more conditions when concurrently present on a date of service. There was a CMS HCC model change in preparation for ICD-10, and this newer model took into account these combination codes and their respective values. HHS based its model on the CMS model, but also includes diagnoses commonly found in young people. The HHS model does not have a Part D portion, as CMS does, but there are plans to move in this direction on the commercial risk adjustment side.


Brian Boyce, BSHS, CPC, CPC-I, CRC, CTPRP, is an AAPC-approved PMCC instructor and ICD-10-CM trainer, and the author of the AAPC CRC™ curriculum. He has specialized in risk adjustment from the very beginning of model utilization, and has assisted large and small clients nationally. Boyce’s special interests are ethics, patient safety, disease management, and managing people and leadership. He is a Desert Storm veteran, where he served on active duty with the U.S. Air Force, with a job specialty of Aeromedical Evacuation. Boyce began physician practice management and medical coding after an honorable discharge. He is CEO of ionHealthcare®, LLC, a company that specializes in risk adjustment coding and support services (email inquiries to info@ionHealthcare.com). Boyce is on the AAPC National Advisory Board and a member of the Richmond, Va., local chapter.

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Brian Boyce

Brian Boyce

Brian Boyce, BSHS, CPC, CPC-I, CRC, CTPRP, is an AAPC-approved PMCC instructor and ICD-10-CM trainer, and the author of the AAPC CRC™ curriculum. He has specialized in risk adjustment from the very beginning of model utilization, and has assisted large and small clients nationally. Boyce’s special interests are ethics, patient safety, disease management, and managing people and leadership. He is a Desert Storm veteran, where he served on active duty with the U.S. Air Force, with a job specialty of Aeromedical Evacuation. Boyce began physician practice management and medical coding after an honorable discharge. He is CEO of ionHealthcare®, LLC, a company that specializes in risk adjustment coding and support services (email inquiries to info@ionHealthcare.com). Boyce is on the AAPC National Advisory Board and a member of the Richmond, Va., local chapter.
Brian Boyce

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Brian Boyce, BSHS, CPC, CPC-I, CRC, CTPRP, is an AAPC-approved PMCC instructor and ICD-10-CM trainer, and the author of the AAPC CRC™ curriculum. He has specialized in risk adjustment from the very beginning of model utilization, and has assisted large and small clients nationally. Boyce’s special interests are ethics, patient safety, disease management, and managing people and leadership. He is a Desert Storm veteran, where he served on active duty with the U.S. Air Force, with a job specialty of Aeromedical Evacuation. Boyce began physician practice management and medical coding after an honorable discharge. He is CEO of ionHealthcare®, LLC, a company that specializes in risk adjustment coding and support services (email inquiries to info@ionHealthcare.com). Boyce is on the AAPC National Advisory Board and a member of the Richmond, Va., local chapter.

5 Responses to “FAQ: 10 Things You Need to Know about Risk Adjustment”

  1. Douglas Palmer says:

    In FAQ 5, the author states “The diagnosis does not need to be treated, managed, or addressed; it merely has to be an ongoing chronic condition noted by the treating provider or part of MDM.”

    This is opinion rather than fact.
    CMS states:
    “Standard ICD-9-CM coding practices support the CMS-HCC model. In all cases, the documentation must support the code selected and substantiate that the proper coding guidelines were followed. Data validation ensures that both are appropriate. Upcoding or changing diagnoses to obtain higher reimbursement without supporting source documents is fraudulent. However, thoroughly reviewing documentation and coding practices through internal auditing procedures ensure that data have been reported correctly and that appropriate reimbursement is received. This benefits both the MA organization and physician/provider. Several guidelines that impact physician documentation and reporting of diagnosis data are listed in the following sections.” The emphasis being on “the documentation must support the code” In his own words, the author refers to his creation of an acronym that includes Treatment, Assessment, Monitor/Medicate, Plan, Evaluate, or Referral – all three of the elements the author states here that are not required are a part of his trademarked acronym. This is contradictory and it is important to note that CMS also requires adherence to documentation guidelines in Risk Adjustment in its statement “The Risk Adjustment models depend upon accurate diagnosis coding, which means that physicians must fully understand and comply with documentation and coding guidelines for reporting diagnoses”. I am unable to find anywhere in any Official Guideline where CMS states “The diagnosis does not need to be treated, managed, or addressed; it merely has to be an ongoing chronic condition noted by the treating provider or part of MDM.” The author then provides examples which would satisfy support by “addressing” the condition. Examples: “I had to consider the patient has diabetes when treating this other condition,” or “I had to consider this patient has cancer, even though I am not personally treating the cancer myself,” etc. where in fact the condition IS INDEED addressed according to the industry accepted acronym MEAT and any trademarked acronym including the same concepts. I professionally disagree with the assertion that a diagnosis “merely has to be an ongoing chronic condition noted by the treating provider” as it would be impossible to validate that it is such without Monitoring, Evaluating, Addressing, or Treating the condition. The rewriting or independent interpretation of guidelines and stating them as fact must be treated with a great deal of care.

  2. Douglas Palmer says:

    FAQ 6 Where the author states “The problem with lists in medical record documentation is that there can be so many variations from one provider to another. CMS knows that providers make mistakes — such as mixing both old and current diagnoses in a list titled PMH, or listing old conditions under the “Active” or “Current” header. Errors like these make clinical documentation challenging to code properly.”

    CMS States “When reviewing medical records, pay special attention to the problem list on electronic medical records. Often, in certain systems, a diagnosis never drops off the list, even if the patient is no longer suffering from the condition. Conversely, the problem list may not document the HCC your MA contract submitted for payment.”

    While the author very clearly promotes his acronym and his own company and asserts that if used it will provide clear guidance in resolving the use of Problem Lists or others such PMH, it is unclear how this differs from MEAT in accomplishing this as it is essentially the same standard restated and does not offer any further clarification. In fact, it brings the issue back to the fact that it must satisfy documentation guidelines in order to be submitted under Medicare Risk Adjustment Guidelines. Without it being documented as Monitored, Evaluated, Addressed, or Treated, it cannot be validated as current. Adding 2 other words that would be categorized into the 4 already in MEAT does no harm but does not create any extraordinary guidance either. Perhaps this trademarked acronym is part of the information that can only be conveyed by the AAPC Program as noted by the author.

  3. Sharon Tran, CPC, CPMA, CRC says:

    The author stated “ICD guidelines, however, have always instructed us to code for all coexisting comorbidities, and especially those that are a part of medical decision-making (MDM). There is no rule in ICD that says a diagnosis has to be treated to be coded, but you cannot allow diagnoses not addressed or treated to influence selection of E/M service codes”; I agree we cannot allow diagnoses not addressed or treated to influence selection of E/M service codes, however, I am unsure how a condition can affect Medical Decision Making without being monitored, evaluated, assessed, or treated by the provider. Most people in the medical coding industry would agree that a coder should not and cannot assume that a condition indeed affected Medical Decision Making without physician’s documentation. In CMS RADV record submssion, each encounter stands alone. A coder cannot possibly be certain that a condition has impacted the Medical Decision Making on a particular date of service simply because it was chronic nature. In my opinion, it is irresponsible and unethical to instruct coders to capture diagnoses for Risk Adjustment purpose without proper documentation by the provider, from an educational stand point.

  4. Douglas Palmer says:

    FAQ 1 I am really at loss to find anywhere that ICD 10 refers to Medical Decision Making (MDM) or even entering E and M or any concept of procedure coding into the Risk Adjustment discussion. The information in this section of the article is hardly quoted or even paraphrased from ICD 10. What ICD 10 Official Guidelines state and consistent with MEAT to support Risk Adjustment diagnosis is “For reporting purposes the definition for “other diagnoses” is interpreted as additional conditions that affect patient care in terms of requiring: clinical evaluation; or therapeutic treatment; or diagnostic procedures; or extended length of hospital stay; or increased nursing care and/or monitoring.” CMS clearly states that ICD 10 Official Guidelines are the basis for RA Coding as well as AHA Coding Clinic®. Evaluation, Treatment, Monitoring …… all right there in the guidelines that CMS indicates in its 2008 Participant Guide (abbreviated version reintroduced in 2013 wit little substantive change) as well as Chapter 7 of the Medicare Managed Care Manual – Risk Adjustment. All one needs to do to see how big a problem unsupported diagnoses are is perform an internet search using the keywords OIG and RADV where a long list of RADV Failures with numbers such as 40 out of 100 records to 60 out of 100 records have been determined to have diagnoses submitted that on audit were not substantiated in the record.

    FROM ICD-10 Official Guidelines for Coding and Reporting
    Section III. Reporting Additional Diagnoses
    GENERAL RULES FOR OTHER (ADDITIONAL) DIAGNOSES
    For reporting purposes the definition for “other diagnoses” is interpreted as additional conditions
    that affect patient care in terms of requiring:
    clinical evaluation; or therapeutic treatment; or diagnostic procedures; or
    extended length of hospital stay; or increased nursing care and/or monitoring.
    The UHDDS item #11-b defines Other Diagnoses as “all conditions that coexist at the time of
    admission, that develop subsequently, or that affect the treatment received and/or the length of
    stay. Diagnoses that relate to an earlier episode which have no bearing on the current hospital
    stay are to be excluded.” UHDDS definitions apply to inpatients in acute care, short-term, long
    term care and psychiatric hospital setting.

    I am in awe of this portion of the article.

  5. donna says:

    In FAQ 5, the author states “The diagnosis does not need to be treated, managed, or addressed; it merely has to be an ongoing chronic condition noted by the treating provider or part of MDM.”
    I agree with the author of the article; where does it state anywhere in the Coding Clinics, ICD 10 Guidelines etc that a condition documented in an outpatient setting needs to show evidence of MEAT in order to be coded. That Coding Clinic was written for inpatient records.

    “The guidelines are written and revised annually by four organizations that hold tremendous sway over the hospital world: CMS, the American Hospital Association (AHA), the American Health Information Management Association (AHIMA) and the National Center for Health Statistics. The latest update contained a brand new statement that threw some coders for a loop: “The assignment of a diagnosis code is based on the provider’s diagnostic statement that the condition exists. The provider’s statement that the patient has a particular condition is sufficient. Code assignment is not based on clinical criteria used by the provider to establish the diagnosis.”” Now what??

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