This episode is first in a two-part series about Clinical Documentation and Coding. In part one, we talk about the importance of Risk Adjustment with Amber Malone-Wright, Director of Clinical Documentation Integrity at CHESS Health Solutions. What is risk adjustment and why is it so important? So risk adjustment is really a way to describe funding for resources and care to manage patients chronic or serious illnesses. It really helps to identify the risk that the patient is going to incur when medical costs that are above or below average for the year. It's really a financial forecasting that the health plans use to predict the future medical needs for the patients. So for example, a health plan receives payment from the government to help pay for the services that that patient is going to seek, whether that's an outpatient visit for chronic condition or an inpatient visit for a serious or acute illness, such as sepsis or a serious infection. And the funding to the health plan that they receive from the government pays those services at the hospital and office visit or primary care level. Risk adjustment matters because it's a way for the providers to report how sick their patients are and to ensure that there are resources available to those patients are there at their fingertips. So when a provider is able to manage their patients chronic conditions and prevent the hospitalizations the health plan actually ends up in a surplus and is able to share those funds with the provider, who is controlling the costs, and those patient chronic conditions. Health plans generally are going to use the funding to offer patients better premiums and other resources as well, such as Meals on Wheels or transportation and ways to lower prescription costs and many other different programs.And how does risk adjustment work?So in risk adjustment, value is assigned to each diagnosis code that falls into this payment model that's used by the government for the health plans. The ICD-10 codes are grouped in what we call HCC's or hierarchical condition categories. And these HCC categories are related to both clinical and financial resources available for those patients. Each diagnosis code that's mapped to one of these categories provides a risk adjustment factor score to identify the acuity or the sickness of that patient. Those risk scores are then calculated and converted into our financial resource for the health plan to cover those services for those patients.How are providers impacted by risk adjustment?So many providers are not directly impacted by risk adjustment because it's a way for the health plan to receive funding. A majority of providers are still part of what we call the fee-for-service reimbursement model, where they're reimbursed for a service they provide to the patient using a procedure code or an office visit code, for example. Most hospitals are reimbursed based on what we know is the MSDRG system when a patient is admitted to the hospital. It's a similar reimbursement methodology to risk adjustment in that the hospitals are paid a lump sum based on the diagnosis to cover the cost of care provided for those chronic or acute conditions that are being treated in the inpatient setting. Value-based care is really shifting the providers to be more responsible with managing the patients more effectively and coding more accurately. This means that providers need to be aware of what specialists are they are referring to how, often the patients are seeing their specialists, if they're going to the ED for unnecessary illnesses, such as urinary tract infections, and how many times they've been admitted to the hospital. All of those are you know primary care gatekeeper responsibilities. This also means that providers need to document and code all of the chronic conditions to the highest level of specificity and this is to...

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