Medicare Advantage (MA) plans are paid by the Centers for Medicare and Medicaid Services (CMS) based on the member’s severity of illness as conveyed by codes from the International Classification of Diseases, 10th Revision or ICD-10-CM that map to the CMS-HCC model; this is referred to risk adjusted payment or MRA. Only certain ICD-10 codes are included in the model and because these codes are tied to payment, the documentation standard is high.
Payments from traditional Medicare and most Medicaid and Commercial plans are based on what the provider did, as conveyed by the codes from the Current Procedural Terminology (CPT) reported for services rendered. These are tied to a set fee schedule by Medicare or another payor, and payment does not vary based on how sick the patient is. This is referred to as fee-for-service payment, because there is a fee for every service rendered. Although some MA plans may pay providers based on FFS, the plan’s overall funding (the pool on money from which payments are made) is largely tied to member health status.
These payment distinctions amount to billing “languages,” if you will, and fluency is required for proper payment. As a matter of fact, the training and certification of billers focuses on CPT codes, documentation of medical necessity needed to support the CPT codes reported, and the billing process. Billers are not trained in risk adjusted payments or the CMS-HCC model. Practices with considerable MA revenue generally employ medical coders, who are skilled in MRA but who may not necessarily have billing training or experience coding CPT. Again… two languages.
Many practices consolidate all the billing functions (e.g., FFS claims submission, MA encounter processing) under the Billing Dept. umbrella, believing those individuals to be fluent in both languages. FFS billing requires specific knowledge of CPT codes and their guidelines, proper documentation of medical necessity for services, modifiers and plan requirements. MA encounters require in-depth knowledge of ICD-10-CM codes and their guidelines as well as clinical aspects of medical conditions, correct documentation of support for medical conditions and sequencing of diagnoses for accurate payment. It’s the rare biller who can move seamlessly and accurately between these two distinctly different “tongues” and bill correctly. We’ve never seen it in 20 years of consulting practice.
The optimal structure is to divide the functions into two distinct areas: FFS billing (which includes the A/R process) completed by the Billing Dept., and MRA encounter processing which is transacted by the MRA dept. This will allow for specialized, knowledgeable staff to focus on each critical revenue cycle area for maximum productivity and financial performance. If this were not possible, the next best solution is to create a process whereby MRA certified coders review encounters before their submission to assure all requirements are met, and billers simply transmit the claims or encounters to the plan.