Challenges of Risk Adjustment in Value Based Care

Value-based care (VBC) models are continuing to gain traction to improve care outcomes while controlling costs. However, the transition to VBC comes with its own set of challenges, specifically around risk adjustment, which is vital to ensuring accurate reimbursement. To better understand these hurdles, UASI asked industry leaders for their insights into the complexities of implementing and managing Risk Adjustment in VBC models.?

Key Challenges in Adopting VBC Models?

Industry leaders in healthcare highlighted several challenges related to adopting Value-Based Care models and identified several barriers;?

Staff resistance to new care delivery and reimbursement models, and a lack of education and training hinders understanding and adoption of VBC. Aligning processes and workflows with new care models can disrupt established practices, while difficulties in aligning with payor contracts, due to varying quality metrics and reimbursement formulas, create further obstacles. Additionally, many healthcare systems face inadequate operational capacity and a shortage of a specialized workforce, making it difficult to scale VBC models effectively.?

To effectively manage value-based care (VBC) models, industry leaders weighed in and identified several key resources to better support VBC implementation.? Those organizations with more mature programs have 6 key components in place in managing a successful program:?

1) The main needs identified were data analytics to track patient outcomes and costs?

2) Comprehensive training and education programs to equip staff with the knowledge to effectively implement VBC.?

3) Leaders in Risk Adjustment would like to see a defined strategy and objectives within their organizations to guide decision-making??

4) The tools and technology to support the strategy.???

5) Financial incentives from payors are needed such as quality measures and shared savings programs to leverage more support for VBC implementation.??

6) Regulatory guidance can also help health systems to navigate VBC complexities and ensure compliance.?

Data accessibility and accuracy are major barriers within Risk Adjustment. Ensuring that data is comprehensive and accurate is needed for calculating risk scores and understanding where to focus efforts. With multiple risk adjustment models in place, organizations struggle to find processes that create efficiencies. Additionally, provider burnout and workflow management issues arise as providers navigate various VBC models.?

To ensure effectiveness, there are a set of metrics to evaluate Risk adjustment and value-based care models:?

• Hospital Readmission Rates: Reducing hospital readmissions indicates the success of preventive care and is a goal of VBC.?

• Mortality Rates: Mortality rates focus on the overall quality of care and patient outcomes.?

• Cost per Patient per Month (PMPM) and Total Cost of Care: Tracking the cost per patient is essential to managing the financial aspects of VBC, ensuring that the system remains financially viable while improving care quality. Total cost of care is a broad metric that captures the financial efficiency of the care model.?

• Shared Savings Revenue: This metric tracks the financial savings generated through VBC initiatives, which are shared between providers and payors.?

• Quality Scores (HEDIS, STAR Ratings): National quality measures such as HEDIS and STAR ratings provide objective benchmarks for evaluating the effectiveness of care delivery.?

• Risk Adjustment Accuracy Scores (RAF, Recapture Rate): These scores are essential for evaluating the precision of risk adjustment models. RAF is the estimated yearly cost to treat a patient whereas the Recapture Rate refers to how well a provider captures recurring HCC diagnoses and is also used to understand future healthcare costs.?

Improvements must be organizational and system wide as industry leaders highlight that viewing Risk Adjustment and VBC as just a revenue cycle or coding issues is a major barrier. Instead, these challenges require an integrated approach involving clinicians, administrators, and payors to drive the necessary changes. As previously stated, healthcare organizations face challenges like staff resistance, workflow management, and data accessibility/accuracy. However, with the right resources these obstacles can be overcome.??

CTA: Let UASI help you bridge the gap by assessing your Risk Adjustment practices, identify gaps, and develop targeted solutions.?

Reach out today!