8 best practices for elevating and integrating RA in value-based care
Success under value-based payment contracts can be elusive for healthcare organizations that have not given sufficient attention to key considerations around risk adjustment (RA).
As healthcare organizations work toward meeting CMS’s 2030 implementation goals for value-based care (VBC), RA should be a top concern. Too often, these organizations’ leaders mistakenly believe all that’s needed for success under VBC is to invest in a strong coding department. Many healthcare executives and clinical leaders understand the importance of RA, but they often underestimate the complexity of the processes and cross-departmental coordination required to accurately capture and support RAF scores.
The reality is that a healthcare organization’s financial stability and ability to consistently deliver high-quality patient care under value-based contracts depends on how well their leaders understand these complexities. Simply put, understanding RA and its role in ensuring accurate revenue capture and compliance is a critical VBC success factor.
RA best practices organizations should adopt from the start
Beyond coding, RA is a comprehensive process that encompasses accurate revenue capture, member outreach, provider education, technical integration, support from physician champions, clinical documentation improvement, and claims submission. To effectively perform this process, organizations should take the following steps. (For a brief discussion of how the RA process works, see the sidebar at the end of this article.)
1 Synchronize cross-departmental efforts. RA requires collaboration among various departments — including IT, coding, data analytics, compliance, training, and quality — where each understands its role within the process and recognizes its counterparts’ contributions for success.
For example, coders today are expected to go beyond simply assigning codes based on documentation. They also must send queries to clarify documentation for Medicare Advantage (MA) work with clinical documentation integrity (CDI) specialists to help them understand coding nuances.
To facilitate such collaborative interactions, the RA team should promote understanding of RA and clarify each department’s role in addressing identified risks. The RA department can conduct cross-departmental workshops to improve communication and understanding of requests across groups and promote a deeper understanding of the importance of RA for the organization’s financial health. The department will require strong leadership to guide and manage this process.
2 Acknowledge the integral role of the revenue cycle. The revenue cycle plays a central role in the RA framework, serving as the conduit through which all critical information flows to payers thereby enabling the organization to receive its entitled reimbursement. The RA department should collaborate with the revenue cycle department and obtain regular reports on claim processing status and International Classification of Diseases (ICD) code adjustments. By understanding how coders adjust ICD codes before submitting a claim, the RA department can refine its provider education training and ensure information flows accurately, smoothly and transparently from patient encounters to final claim submissions.
3 Implement systems to support accurate provider documentation. Fundamentally, RA programs should be focused on promoting precise and comprehensive provider documentation, without which accurate payment is elusive. Coders can assign accurate codes only if providers have documented their care correctly in accordance with the documentation standards required by CMS. This underscores the need for well-designed systems and tools to support providers’ documentation efforts.
For example, a health system’s RA team could collaborate with the product team to develop electronic health record (EHR) tools that streamline the documentation process for providers during patient visits. One such tool could highlight the patient’s past diagnoses and suggest possible new diagnoses based on clinical indicators from the patient chart. This approach could be complemented by a retrospective chart review to ensure the documentation accurately matches the selected ICD codes.
4 Offer continuous provider education. Given the intricacy of RA documentation, it requires structured, ongoing provider education to navigate its evolving requirements. Therefore, for sustained success, education on RA must be embedded in the organization’s culture and not treated as a one-time event.
Effective ongoing provider education requires the following steps:
- Implement onboarding RA training.
- Provide RA refresher courses six months after hiring.
- Host annual sessions covering CMS updates and coding changes.
- Perform chart reviews.
- Hold one-on-one sessions to discuss specific areas for documentation improvement based on chart review findings.
- Designate a provider champion with in-depth RA training to mentor peers.
Including features such as a “diagnosis-of-the-month” in regular provider meetings also can help deepen understanding of documentation statistics, impact analysis and accuracy.
The physician champion’s role may include overcoming initial resistance from providers highlighted. This role therefore requires strong leadership support and the ability to communicate clearly about the RA program’s benefits.
Implementing these steps can substantially improve accuracy of diagnoses capture. In one case, a health system with more than 400 primary care providers improved accuracy from 75% to just over 95% across its primary care departments.
5 Establish a CDI program. A CDI program offers a strategic advantage, affecting everything from patient care to payment. Such programs rely on chart reviews to ensure the accuracy and completeness of documentation.
Initially focused on retroactive chart reviews, the industry has shifted toward proactively incorporating chart review into pre-visit planning to ensure patients’ diagnoses are comprehensively understood at their visit. By leveraging AI, using a structured data-mining algorithm or reviewing the chart manually, a CDI professional can identify unaddressed diagnoses and relay the information to the clinician before the scheduled visit, ensuring that the diagnosis is appropriately addressed.
Both types of chart reviews are essential for getting a thorough picture of the patient’s disease burden. Prospective reviews enable providers to address all possible diagnoses with patients, while retrospective reviews assess the accuracy of how the diagnoses are documented.
6 Use leading indicators to drive performance. Relying on lag indicators to measure performance is like driving while only looking in the rearview mirror; you only see where you’ve been, not where you’re going. By contrast, leading indicators are like headlights illuminating the path ahead and enabling real-time adjustments. Metrics such as provider recapture rates, documentation accuracy rates, patients seen to date, prevalence rates and average codes submitted per provider are leading indicators that can inform and guide RA efforts. They are crucial for maintaining the course, anticipating changes and preserving a competitive edge. While the final RAF score is valuable, it is the ultimate lagging indicator, given that the CMS’s initial RAF score lags a year or more.
For example, one VBC organization’s RA department collaborated with a payer to exchange information on prevalence of rates in the local area compared with that of similar organizations and discovered it had a much lower percentage of patients with diabetes complications. The organization conducted chart reviews to determine whether documentation inaccuracies affected the capture of this diagnosis. Enhancing provider education and resubmitting corrected claims effectively addressed the issue and improved its reporting accuracy.
7 Ensure compliance to mitigate risks. To ensure compliance, organizations should consistently follow and update their practices according to CMS and American Health Information Management Association guidelines. Adopting a proactive approach significantly reduces the risk of penalties from possible audits. Navigating an RA program without understanding changing guidelines and regulations is risky.
The priority for RA activities should be to ensure documentation is accurate and complete rather than to optimize RAF scores. Implementing an audit program to review codes submitted by internal coders or coding vendors safeguards against financial and compliance risks in potential audits.
Recent audits by the Department of Justice (DOJ) have targeted health plans for one-sided auditing practices.a Effective audits must review charts “both ways,” identifying additional diagnoses and validating those found in the same notes.
8 Optimize RA performance with strategic staffing. The RA team’s composition is crucial. Strategic staffing involves assembling a team with the expertise and insight necessary to cover all aspects of RA. From the RA lead to the clinical coders, each team member plays a vital role in executing the program’s mission and adapting to its ever-changing environment. Clinician team members should understand RA nuances and be able to work with other physicians to foster buy-in for the program. And coders should be specifically skilled in RA coding. Proficiency in fee-for-service coding doesn’t automatically qualify someone for managed care coding due to methodological differences.
Having a clinician team member is essential. Even with the best coders and implementers, the team will struggle if it lacks a clinician because an RA program’s effectiveness depends on provider documentation and the team’s ability to relate to and communicate effectively with physicians.
One possible approach is to structure the RA team using a dyad approach involving a clinician leader and a director of implementation to ensure a strong connection with providers and steady program advancement.
Additional drivers of RA program success
Effective RA programs demonstrate a commitment to the following:
- Ensuring patients are seen annually for complete and accurate diagnosis capture
- Maintaining accurate problem lists
- Integrating well-designed in-home assessments into EHRs with appropriate follow-up
- Adhering to CMS submission timelines for timely and accurate data provision
They also can simplify essential processes by shortening ICD drop-down lists to exclude rare conditions that take up valuable EHR space, making common diagnoses more accessible to physicians by minimizing their need for excessive scrolling. To maintain compliance, lists must be ordered by frequency, not reimbursement level, thereby helping providers choose the right option.
As an example of a well-configured EHR, a 100,000-member health plan implemented a best practice alert (BPA) to ensure the accuracy of breast cancer diagnosis submissions.b Before implementing the BPA, the diagnostic accuracy for breast cancer was 82%. After it was implemented, the accuracy rate rose to 96% within six weeks.
By addressing such areas thoughtfully and systematically, with strong leadership support and clear communication about the benefits, many organizations have enhanced their RA programs, ensuring that their financial outcomes accurately reflect the quality of patient care.
Footnotes
a. DOJ, “Medicare Advantage provider Seoul Medical Group and related parties to pay over $62m to settle False Claims Act suit,” press release, March 26, 2025; and DOJ, Medicare Advantage compliance audit of specific diagnosis codes that Humana Health Plan, Inc. (Contract H2649) submitted to CMS, report no. A-02-22-01001, Sept. 25, 2024.
b.BPAs are clinical decision-support tools designed to enhance patient safety and documentation accuracy. For instance, when a clinician orders penicillin for a patient, a BPA can alert the physician if the patient has a penicillin allergy. The alerts, which can be configured based on institutional protocols, are triggered by such specific clinical actions.
An overview of RA: Its purpose and how risk scores are calculated
Healthcare organizations require accurate clinical documentation for appropriate risk adjustment (RA) and reimbursement. When a clinician records hepatitis C in a patient’s diagnosis field, the corresponding International Classification of Diseases, version 10 (ICD10) code is nonspecific and does not qualify for inclusion in the hierarchical condition category (HCC) reimbursement model. However, documenting chronic hepatitis C ensures proper classification within the HCC model, assigning a risk-adjustment factor (RAF) of 0.185. By failing to accurately document this diagnosis or omitting it entirely, a healthcare organization can miss out on as much as $2,000 per patient.
Risk scores are calculated for each patient, with an average risk score standardized at 1.0. A patient’s total risk score is derived from multiple contributing factors, including:
- Demographic coefficients. These include factors such as age, gender and dual eligibility status.
- HCC coefficients. Each HCC (a disease category, such as diabetes) is assigned a specific coefficient weight based on its anticipated impact on healthcare costs.
- Comorbidity interactions. Certain combinations of conditions may lead to an increased risk score due to their synergistic effect on patient morbidity and healthcare utilization.
- Total number of diagnoses submitted. Only one diagnosis per HCC category is considered for payment calculations. Moreover, conditions within the same category may supersede or override one another to prevent duplication and ensure accurate risk stratification.
The total RAF score is multiplied by the base per-member, per-month (PMPM) payment to determine the capitated payment a Medicare Advantage (MA) plan receives for an individual beneficiary, as illustrated in the exhibit below. Higher risk scores correlate with increased payments, reflecting the expected cost of care for higher-risk patients.
Sample calculation for a risk-adjustment-factor (RAF) score
| Factor | Coefficient |
|---|---|
| Male, aged 72 | 0.420 |
| HCC 85 (congestive heart failure) | 0.368 |
| HCC 18 (diabetes with complications) | 0.302 |
| HCC 111 (chronic obstructive pulmonary disease) | 0.3o5 |
| Total RAF score | 1.395 |
This methodology ensures that capitated payments are aligned with patient complexity, promoting appropriate resource allocation within MA plans.