Social factors need to be added to risk adjustment to advance health equity

Photo: Kupicoo/Getty Images

Improving health equity requires changes to risk adjustment, physicians said Tuesday.

Current risk adjustment underestimates the total cost of care of patients who have comorbidities and socially complex issues, said physicians who spoke Tuesday during a Primary Care Collaborative session on achieving equitable primary care services. 

Current Hierarchical Condition Category (HCC) coding used for risk adjustment focuses on a single disease without taking into account whole-person care, they said.

Socially complex issues can often lead to higher utilization of healthcare, said Dr. Tracey Henry, an associate professor of medicine at Emory University and a general internist.

She gave the example of a 50-year-old woman with a history of high blood pressure, diabetes and heart failure who was admitted to hospital. The woman works two part-time jobs and takes care of her two children as well as her parents.

"What we're seeing in safety net populations, we're often missing the mark when focused on a single disease," Henry said. "When she's coming in with low blood sugar and diabetes, how do you code when she also has other comorbidities? How do we garner a more complete picture for the patient?"

The physicians also questioned whether the current risk adjustment system improves the quality of care for the patient. 

Risk adjustment creates strong incentives to focus on HCC coding, with systems using diagnosis codes that trigger a greater sum of money rather than focusing on whether the care improves health, said Dr. Robert Saunders, senior research director for health care transformation at Duke-Margolis Center for Public Policy. 

There is strong documentation when first creating codes, he said. The challenge is how to include social factors in risk adjustment to advance health equity. There's much interest in incorporating social factors into overall health, but the current codes need work to improve health equity.

WHY THIS MATTERS

One issue is reimbursement. Physicians are not getting paid to treat the whole patient, rather than a specific disease, they said. 

Current HCC coding underestimates the total cost of care. Z codes that provide descriptions for when the symptoms a patient displays do not point to a specific disorder – but still warrant treatment – do not go far enough, they indicated. 

Physicians need bidirectional effective communication and interoperability, especially to get to value-based models, such as capitation, they said.

Other countries are adjusting payment for social services, said Dr. Robert Phillips, co-director of the Center for Professionalism and Value in Health Care.

Phillips has been part of conversations with the Centers for Medicare and Medicaid Services on incorporating social risk factors into Medicare Advantage and Medicaid payments. Sessions held on March 31 and May 12 in Washington, D.C., included discussion on the need to reduce the gaming of risk adjustment and to create accountability focused on outcomes, not processes. 

THE LARGER TREND

Risk adjustment was originally designed to avoid the cherry-picking of healthy patients, Saunders said. 

Risk adjustment payment is based on a patient's health and is used to adjust plan bids, as well as payments to plans based on their enrollee's expected healthcare costs. The CMS-HCC-based Medicare risk adjustment models are prospective: diagnoses in one year are used to predict costs in the following year.

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org