Options Expanding for Risk Adjustment

As healthcare shifts to value-based reimbursement, provider organizations are engaging in more risk-based contracts and payer organizations are putting increased focus on reimbursements and member quality of care. To succeed with such endeavors, both payer and provider organizations must be able to accurately and properly manage the care of their most at-risk populations. This includes a shift to more prospective capabilities that enable organizations to move beyond retrospective strategies.

In response to this need, a growing field of vendors now offer risk adjustment technology and services. In our latest report on risk adjustment, we set out to discover which vendors offer the wide breadth of capabilities that will allow payer and provider organizations to consolidate to fewer risk adjustment solutions. We also wanted to find out which solutions excel at driving the quality and reimbursement outcomes organizations need to remain viable.

Dissatisfaction Growing with Industry Mainstays

Though the market was once dominated by large vendors like Change Healthcare, Inovalon, and Optum, a variety of additional players are now proving themselves to be viable options. Some of these vendors provide focused functionality, and others claim to offer more comprehensive capabilities.

As shown in the graphic below, we found that some of the vendors with the largest customer bases and most comprehensive functionality—notably Inovalon and Optum—also have the lowest satisfaction. The most common complaints among dissatisfied Inovalon and Optum customers are that the technology is outdated and the vendors do not reliably keep their promises.

This dissatisfaction is driving significant portions of some customer bases to consider other options. Several vendors have 20%–45% of interviewed respondents saying their current solution is not part of their long-term plans. If these organizations aren’t sticking with their current vendor, where do they intend to invest going forward?

Consideration of Midsize and Small Vendors on the Rise

We found that while most of the market mainstays still garner strong consideration, organizations are also turning their attention to some of the midsize and smaller vendors, including Episource, Pulse8, GeBBS Healthcare Solutions, Health Fidelity, and Talix (these findings are based on feedback from 23 organizations that are currently making or have recently made a risk adjustment purchase decision). These vendors—and others less frequently considered—may not yet offer a full range of risk adjustment capabilities, but many are expanding their offerings, and payer and provider organizations are taking note.

 EXL has recently begun expanding their analytics-focused offering to include broader capabilities. The early adopters of these capabilities report good satisfaction, and both they and the vendor’s general customer base are optimistic they will achieve additional outcomes as EXL continues to build out their offering.

Episource has also worked to continue expanding their broad risk offering. Customers particularly highlight the chart retrieval and coding services; customers feel that other areas—such as health assessments—were oversold and need more development. While Episource is seen as committed to new development, this process is sometimes a little slower than customers would like.

More details on the strengths and weaknesses of these and other vendors in the risk adjustment market can be found in the report.

Looking to the Future

While retrospective capabilities will always be important for complying with government reporting requirements, we expect that going forward, vendors will continue to develop more prospective capabilities that enable payer and provider organizations to more proactively identify and manage their most at-risk populations. We also believe that as time goes on, solution capabilities will continue to get broader and deeper, enabling organizations to consolidate to fewer solutions.

Future KLAS research in this market will continue to validate these capabilities and also drill down more deeply into specific high-interest areas of risk adjustment functionality (e.g., analytics and artificial intelligence).

For additional findings about the risk adjustment market, please check out the report.

Photo credit: Have a nice day, Adobe Stock