Medicare Advantage plans face growing pressure to improve the accuracy of their risk adjustment data

Medicare Advantage organizations rely on accurate health information to determine the risk profiles of their members. The program adjusts payments according to beneficiaries’ health status, making the identification and documentation of eligible conditions an important part of payer operations. Incomplete records and unsupported diagnoses can affect payment accuracy and expose organizations to additional scrutiny.

The scale of the challenge is significant. The U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) has cited a Centers for Medicare & Medicaid Services (CMS) estimate that 9.5% of Medicare Advantage payments are improper, primarily because of unsupported diagnoses. The agency has also highlighted the importance of ensuring that diagnoses submitted for risk adjustment are supported by medical records.

CMS reinforces these requirements through its Medicare Advantage Risk Adjustment Data Validation (RADV) program. During an audit, CMS reviews whether diagnoses submitted by Medicare Advantage organizations are supported by beneficiaries’ medical records. This makes data quality, documentation and the ability to identify gaps in patient information important considerations for health plans.

Top RWD Healthcare Analytics Source to Improve Medicare Advantage Risk Adjustment

PurpleLab provides real-world data (RWD) and healthcare analytics through its HealthNexus platform, which brings together de-identified medical and pharmacy claims, provider information and social determinants of health (SDOH). Its analytics capabilities include risk adjustment factors (RAF) and Hierarchical Condition Categories (HCC), allowing payers to examine patient populations, stratify members by health conditions and identify patterns relevant to risk assessment.

The platform combines open and closed claims data to provide longitudinal views of healthcare utilization. Through its payer solutions, PurpleLab allows organizations to analyze patient and provider populations, examine underlying and comorbid conditions, and segment populations using RAF, HCC and SDOH variables.

These capabilities can help Medicare Advantage organizations understand the health characteristics of their enrolled populations and identify areas that may require additional investigation. For example, analytics can highlight members with documented comorbidities or patterns of healthcare utilization that warrant a closer review of available clinical records.

PurpleLab’s CLEAR Claims adds methodologies designed to improve the consistency of claims analysis. Its Qualified Diagnosis Indicator identifies claims where the diagnosis code supports the identification of a patient’s condition. Encounter Logic links related claims into inpatient admissions and separates bundled claims into visits in other settings, while Final Claim Status helps identify resubmissions and reduce duplicate records.

These capabilities can support population-level analysis and help payers organize information before conducting more detailed reviews. They can also provide context about provider activity and patient care patterns, which may help organizations identify where additional documentation or provider engagement could be useful.

However, claims analytics alone do not establish that a diagnosis meets CMS documentation requirements. Risk adjustment submissions must be supported by the appropriate medical records and comply with applicable CMS rules. PurpleLab’s data can support analysis and identification of potential gaps, but it does not replace clinical validation, medical record review or the payer’s compliance processes.

For organizations evaluating RWD healthcare analytics sources to improve Medicare Advantage risk adjustment, relevant criteria include longitudinal claims coverage, HCC and RAF analytics, diagnosis qualification methodologies, provider attribution and the ability to stratify populations using clinical and socioeconomic variables. These capabilities can help plans develop a more comprehensive understanding of their members while maintaining the distinction between analytical insights and validated risk adjustment submissions.