ACOs & The Importance of Risk Adjustment Coding in MSSP

ACOs Risk Adjustment Coding IN Medicare Shared Savings Program MSSP

CMS released its final Medicare Shared Savings Program rule, called “Pathways for Success” for ACOs. The new rule is designed to help establish a path toward risk.

CMS = Centers for Medicare & Medicaid Services || MSSP = Medicare Shared Savings Program || ACO = Accountable Care Organization


MSSP lays out a clear transition to risk, and allows ACOs to start at different points, depending on where they are as an organization. Also, it extends the agreement period from 3 to 5 years, which provides more time to measure performance against the benchmark. This creates a Basic and Enhanced track option en route to risk. (See Image A below)


Image A Basic & Enhanced Tracks

Basic & Enhanced Tracks
Basic & Enhanced Tracks


There are several best practices an ACO can adopt to help succeed within the new model. Many ACOs are now looking toward Risk Adjustment which not only allows highlighting of high-risk patient populations, but will also provides a more accurate way of predicting cost and determining reimbursement.


The adoption of HCC risk adjustment best practices has been recognized by Medicare Advantage plans for several years. In contrast, ACOs who participate in Medicare Shared Savings Program (MSSP) have opted away from any type of program, as they felt it had little effect on their benchmark. This is often due to an ACOs past experience within the MSSP.  However, the new changes open many doors to those who may have shied away from risk in the past, for reasons such as:


  • Benchmarks were based 100% on an ACO’s historical success.
  • No adjustments were made on the true risk score of the beneficiary, thus no penalty for similar low risk scores year over year.
  • False/inaccurate predictions of condition profiles of beneficiaries.
  • Re-enrolled beneficiaries given a demographic adjustment only, making it very difficult for an ACO to improve coding and increase benchmarks.


Given the new Pathways to Success Rule, ACO groups are being shown risk adjustment in a different light. There are no more restrictions on RAF changes for the historical beneficiary. Instead, there is a 3% limit on the total increase from historical to performance year.


ACOs continue to lag in adoption of HCC coding practices. From the most recent 2019 Shared Savings PUF file, 49% of groups have seen a drop in RAF from benchmark year 3 (BY3) to Performance Year (PY1). RAF scores on these groups dropped from 1.0149 within BY3 to .9819 in PY1 on average, showing a -3.25% drop (see below in Image B). As a result, ACOs could have faced a significant uphill battle over the next few performance years as they attempt to true up their future benchmarks. This is one significant issue addressed by MSSP.


Image B: RAF Decrease PUF file 2019 ACO MSSP


Coding improvements are capped at 3%, however, with this drop (shown above) from BY3 to PY1, RAF improvement can actually be significantly above the allowed 3% to offset the drop of -3.25%. Therefore, now is the time for ACOs to begin adopting HCC Risk Adjustment best practices to help in this effort. 


By adopting best practices within HCC coding, you can ensure that your medical group has the highest specificity of diagnoses, ensuring quality of care and compliance.


What exactly are these best practices that can be adopted?


  • Educating Providers
  • Making correct preparations prior to encounter
  • Documentation of all chronic conditions that are current
  • Ensuring a clean clinical workflow to display conditions for clinicians
  • Post-encounter review for quality assurance


As value-based care is being adopted on a wider scale, the old model of Fee for Service payment is slowly dwindling. More time is being spent with a patient to treat all chronic conditions at the encounter is becoming best practice.


One of the major issues that medical groups contend with is the ability to use all relevant data to create an aligned clinical workflow that helps the physician recapture, diagnose, and reject any conditions which are inaccurate. A melee of data is combined in the form of claims data, RX data, member eligibility, historical diagnosis, and utilization. The ability to organize this data into actionable insights, clinical suggestions, and quality opportunities is a huge task for any ACO. 


Here at DoctusTech, we can offer a solution to this issue…..


Click below to see how we solve for this at DoctusTech .


Need better RAF scores and recapture rates in your practice? Demo the DoctusTech integrated tools, and learn how to make your value-based care contracts more profitable. Schedule a demo today.


Demo the tools that make HCC coding easy

Value-based Care Contracting 101

Value-Based Care Contracting 101

Fee-for-service contracts continue to be a challenge for VBC. The pandemic led to a drastic reduction in volumes that impacted FFS contracts revenue ($15B loss due to volume dips).
During the pandemic, organizations with value-based contracts were able to pivot operations to maintain revenue even when the volumes dropped. VBC payments will increase rapidly in the near future as hospitals and physician practices look to protect themselves against future downturns.

money drip
Image Credit:

Revcycle Intelligence (of Xtelligent Healthcare Media) shared an in-depth article highlighting how to succeed at value-based contracting. We share our takeaways from the article below. 
Prior to engaging in contract negotiations:

  • Have a strong clinical leadership team to engage your physicians as their top priority (not 0.2 FTE). 
  • Build a strong referral network that can be managed tightly with hospitals and specialists
  • Make a meaningful investment in changing FFS workflows to optimize patient care and care coordination. Tracking and accountability are key.
  • Build strong financial models. Do you have the resources that you need to manage those medical costs and administrative costs of that population that you might get?


Heading into contract negotiations:

  • Promote your organization’s quality metrics. Do you have longer clinic hours compared to your neighboring groups? Do you have better STARS/HEDIS scores? Are you leading in patient satisfaction scores?
  • Build an experienced team to handle payor contract negotiations. Every contract is unique, and the fine print matters. Most importantly, understand how your payor will attribute patients.
  • Don’t over-commit on what data you can collect and report. Prepare your IT infrastructure well ahead of time. 
  • Make sure your payors will be good partners in promoting your group and helping you grow your patient base.


After the negotiation:

  • Growth is key because organizations need a panel of patients for contracts to work, and those patients cannot all be high-risk. 
  • Keep close tabs on provider satisfaction, physician growth, and employer satisfaction with the care delivered. 
  • Noticeable dips in quality performance may necessitate change and possibly another round of negotiation. Identify shortfalls early and frequently communicate with your payor partners.
  • Success begets success with payor contracts. 

Read More:  Value-Based Contracting 101: Preparing, Negotiating and Succeeding
Doctus Team