More on Reimbursement

Plans should be prepared for the difference between operational and financial success

In the first part of this series, we looked at a transformative year in healthcare and presented the ongoing shift from the Risk Adjustment Processing System to the Encounter Data Processing System.

Here we present submission deadlines and what success does, and doesn't mean, so plans are not surprised when a high acceptance rate results in unexpected file rejections or a lower than estimated risk transfer or reinsurance payment.

Dissecting the timeline for PY 2015 submissions

In the commercial marketplace side of the business, one item of significance that many in the industry are following is the recently published submission schedule for PY 2015.

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The most significant dates for 2016 are as follows:

Oct. 30, 2015: By this time, issuers should have submitted to the EDGE server 90 percent of their enrollment records and 25 percent of their pharmacy and medical records for the first and second quarters of 2015.

January 9, 2016: Issuers must submit to the EDGE server 90 percent of claims and enrollment records for the first three quarters of 2015.

March 4, 2016: Issuers must submit to the EDGE server 90 percent of claims and enrollment records for the entire 2015 benefit year.

April 30, 2015: Deadline for all data to be submitted to the EDGE server for 2015 benefit year.

CMS has stated that failure to adhere to these deadlines will not necessarily result in sanctions, but rather, outreach to establish an action plan to bring submission volumes into compliance.

However, health plans should not be patting themselves on the back if they achieve greater than 90 percent acceptance early on. It is critical health plans remember this is only an indicator of operational success, not financial success.

The two business problems that stand in the way of both operational and financial success are compliance through complete and accurate submissions and payment accuracy.

Health plans should not assume achieving greater than 90 percent submission success automatically translates into meeting risk adjustment transfer and reinsurance estimates, or that there is adequate visibility into payment accuracy.

Payment accuracy is directly affected by the quality of the provider's diagnosis coding, and it is imperative robust retrospective and prospective programs are implemented in addition to the governance that is supporting compliant submissions.

These programs should help pinpoint accuracy and care gap issues affecting risk scores at the member, provider and population levels.

Payment accuracy is also affected by a number of other issues that often escape the radar of risk adjustment leadership, because the solution lies in coordination with other functional areas of the business.

Such areas could include manually adjudicated claims, pended claims management, inaccurate denials, mismatched timely filing and many others – the root cause of which is often lack of automation.

We also cannot forget the impact of ICD-10. Though the media continues to trumpet CMS' success with testing, this does not include the risk adjustment side of the equation.

Plans should avail themselves of the models and crosswalks that are generally available to gauge the impact on their operations and finances, so they are not unpleasantly surprised by unexpected file rejections or lower than estimated risk transfer or reinsurance payments.

There is much more activity ahead in 2015 for our industry with ICD-10 and the aftermath and the finalization of the EDPS filtering logic and MAO-004. Sprinkle in the imminent shift to value-based care, and it is shaping up to be quite a transformative year in healthcare.

Dawn Carter is director of product analysis at Edifecs.