By Lisa DiSalvo
Recently, the aim to reform healthcare has focused hospitals, private practices, and other provider settings on improving care quality while reducing costs. Healthcare reform has also driven initiatives such as last year’s ICD-10 implementation, meaningful use incentives, and other clinical and operational improvements.
However, healthcare organizations must also be aware of changes happening outside their segments. For instance, CMS has started the transition from the Risk Adjustment Payment System (RAPS) to the Encounter Data Processing System (EDPS) to establish risk adjusted payments for Medicare Advantage Organizations (MAOs). This transition has the potential to impact reimbursement and revenue flow throughout the industry.
With other initiatives taking center stage for healthcare providers, the RAPS–EDPS transition may not even be on your radar. Due to the additional information required by EDPS, there may be more chances for errors and rejections of submitted codes. These changes could already be affecting MAOs’ revenue. By adopting key strategies, MAOs and downstream affected entities can mitigate their own revenue loss related to this transition.
What Providers Need To Know About The Transition
In a recent Final Call Letter, CMS outlined its incremental RAPS to the EDPS transition plan, which went into effect this year. Beginning in payment year (PY) 2016, CMS will change the calculation for risk adjusted payments to MAOs by using encounter data submitted by MAOs along with RAPS, starting with a phased-in 10/90 percent EDPS/RAPS split. The EDPS percentages will then increase every year as follows:
Health plans that encounter challenges with the EDPS system may be experiencing revenue loss due to RAPS–EDPS differences and submission errors. According to an Altegra study, these organizations can expect revenue decreases between 1.8 and 27.6 percent, with an average decrease of 11.9 percent — translating to millions of dollars in lost revenue.
IT professionals within these organizations need to be aware of these issues so they can support their internal customers. Unfortunately, the analytics required to research and close these data gaps is complicated and requires additional resources, so lessening the revenue loss may take some time.
Maximizing Reimbursements During The RAPS–EDPS Transition
For these reasons, it is imperative providers who participate in risk adjustment based gain share arrangements be proactive during this migration. The following are best practices that can be implemented by providers to reduce the potential impact of the RAPS–EDPS transition on MAOs and mitigate reductions in gain share payments.
Although provider organizations may not be feeling the effects yet, it’s not difficult to imagine how MAO’s lost revenue might impact provider gain share arrangement — now or down the road. Don’t wait to find out. Take action now before the RAPS–EDPS migration affects your bottom line.