How to Prepare for a RADV Audit

Research compliance in the CMS risk-adjustment model and you might come away with more questions than answers. There are few rigid guidelines or clear regulations, leaving Medicare Advantage Organizations (MAOs) in a state of some uncertainty. One thing they can be sure of, however, is that they’ll inevitably face a RADV audit. This blog post explores how to prepare for a RADV audit, the potential consequences of noncompliance, what auditors are looking for, and more.

What are RADV audits?

The acronym ‘RADV’ stands for risk adjustment data validation – which hints at the purpose behind these audits. In effect, CMS wants to ensure that documentation is accurate and reliable, that it reflects the diagnosis and management of a patient’s condition, and, therefore, that reimbursement is appropriate to the patient’s estimated cost of care.

Here’s how CMS defines the RADV program:

“The Medicare Advantage Risk Adjustment Data Validation (RADV) program is CMS’ primary way to address improper overpayments to Medicare Advantage Organizations (MAOs). During a RADV audit, CMS confirms that any diagnoses submitted by an MAO for risk adjustment are supported in the enrollee’s medical record.” – CMS

CMS states that they’re looking for ‘risk adjustment discrepancies’ that lead to payment errors – in essence, whether MAOs have been overpaid.

Why are RADV audits important?

RADV audits are important for the same reason that accurate HCC coding is important. The CMS risk-adjustment model only works if MAOs document risk-adjusting conditions appropriately – allowing CMS to accurately calculate each patient’s estimated cost of care, and reimburse providers appropriately. RADV audits help ensure this process is working as it should.

From an MAO’s perspective, RADV audits help to reveal overpayment errors due to incorrectly-recaptured acute codes, incorrect initial encounter codes, and exclusion codes coded together.

The risk of non-compliance

Complying with CMS’ regulatory requirements will help organizations receive accurate reimbursement, and ensure positive patient outcomes through the correct allocation of resources. Non-compliant organizations, however, risk owing CMS up to three times the overpayment, plus a fine of $11,000 per violation. And as these examples show, fines can really add up:

What the auditors are looking for

In a nutshell, CMS wants to ensure that:

The diagnosis is accurate
The documentation accurately reflects the diagnosis

“The true north is: ‘are the diagnosis and management appropriate’?’ That’s what compliance means, and that’s what auditors are looking for,” explains DoctusTech CEO Dr. Farshid Kazi.

But beyond that, the specifics remain frustratingly unclear. “All we can really be sure of are things people have been penalized for previously,” says DoctusTech’s Director of Quality Dr. Adam Steele. “While there are audit standards online and in CMS’ training book, these standards aren’t necessarily the same things we see organizations get penalized for.”

This leaves MAOs with little choice but to prioritize specific diagnoses and thorough documentation, accurate HCC coding, and the appropriate care and management of patients’ conditions.

How to prepare for a RADV audit

While hard-and-fast compliance regulations may be thin on the ground, following these best practices can help organizations remain compliant and prepare for a RADV audit.

Train and educate staff

Provide ongoing HCC education for coders, CDSs, scribes, and clinical staff on documentation and coding best practices.
Educate staff on the importance of compliance with RADV audit requirements.

Conduct internal reviews

Perform thorough chart reviews to ensure diagnoses submitted for risk adjustment are supported by the appropriate documentation.
Hold regular internal audits to identify discrepancies in coding and documentation.

Ensure data integrity and accuracy

Ensure ICD-10 codes are accurately assigned based on documented clinical conditions.
Confirm that any data submitted to CMS matches patients’ medical records.

Develop a response plan

Assemble a dedicated audit response team with clearly defined roles and responsibilities.
Establish a protocol for responding to audit requests, including timelines and communication strategies.

Hold mock audits

Conduct mock RADV audits to identify potential issues and improve your response processes.
Use feedback from mock audits to make necessary adjustments in documentation and coding practices.

Use technology

Technology can be used to help organizations prepare for RADV audits through effective HCC coding education and retroactive document review.

If your organization needs help ensuring ongoing compliance and preparing for RADV audits, DoctusTech can help.
Book a demo today.

April 28, 2023February 23, 2024

What is the CMS HCC Risk Adjustment Model?

The CMS, or Centers for Medicare & Medicaid Services, developed the HCC Risk Adjustment Model to determine Medicare Advantage (MA) plan payments, based on the expected healthcare costs of plan enrolees. HCC stands for Hierarchical Condition Categories, which are groups of medical conditions that share similar expected costs of treatment.

Since its inception in 2004, the CMS HCC Risk Adjustment Model assigns each MA enrolee a risk score based on their demographic information – such as age and gender – their medical conditions, and the severity of those conditions. The risk score is calculated by first assigning HCCs to each enrolee based on their medical diagnoses, then applying a weight to each HCC based on the expected cost of treatment. These weights are then added up to determine the enrolees’ overall risk score.

The CMS HCC Risk Adjustment Model is designed to account for differences in the health status and expected costs of care among MA enrolees, and to ensure that MA plans are adequately compensated for the medical needs of their enrolees. The risk adjustment methodology is used to adjust payments made to MA plans based on the enrolee’s risk score, with higher risk scores resulting in higher payments to the MA plan.

The CMS HCC Risk Adjustment Model is updated annually to reflect changes in the prevalence and costs of medical conditions, as well as changes in the coding and classification systems used to identify medical diagnoses.

What is a RAF score?

The Risk Adjustment Factor (RAF) score is a measure used to adjust the payment for healthcare services based on the health status and expected medical costs of the patient. The RAF score is typically used in the context of Medicare Advantage (MA) plans, which are a type of health insurance offered by private companies that contract with Medicare to provide Medicare benefits to eligible individuals.

The RAF score is calculated using a formula that takes into account the patient’s demographic information, such as age and gender, as well as their medical conditions and the severity of those conditions. The formula assigns a weight to each medical condition based on its expected cost of treatment. The weights are then added up to determine the patient’s overall RAF score.

So a patient has a RAF of 1.5 may have a 0.6 from demographics, a 0.3 for diabetes, and 0.6 from COPD.

The RAF score is used to adjust the payment made by Medicare to the MA plan for each patient. Patients with higher RAF scores are considered more expensive to treat, and the MA plan will receive a higher payment to cover the expected costs of care. This helps to ensure that MA plans are adequately compensated for the medical needs of their patients, and that patients with more complex health conditions receive appropriate care.

How do HCCs relate to it?

Each year, Medicare calculates an amount of money that will be paid per member per month (PMPM). This same base rate is paid out for every patient, regardless of what services were done. This base rate is then multiplied by the patient’s RAF score so that more money is payed out to take care of patients with a high RAF (sicker patients) than those with a low RAF (healthier patients).

If a CMS patient has a high RAF, they he/she is expected to get extensive medical care, clinicians who enrol these are reimbursed more than those who have low RAFs. The additional reimbursement amounts for patients who qualify will not be paid to organizations that do not properly or completely document HCC codes as incorrectly documented codes do not add to the RAF score.

To know more about HCC coding and how to improve it, you can refer to our blog on ‘How to improve HCC coding and avoid risks.’

March 21, 2022February 26, 2024

ACO REACH Model Replaces GDCP (DCE) Model – But What Really Changed?

CMS recently unveiled their replacement for the Direct Contracting Model (DCE), renamed now as the ACO REACH Model. Many of the original Direct Contracting Model tenets will remain the same, with a few significant changes announced.

From heightened scrutiny on up-coding and documentation accuracy to improved Access and Equity, the new model looks to improve upon DCE without replacing it entirely.

Download the full CMS webinar presentation deck, and read our interpretation of the new guidelines.

Access the full report below.