Q&A: The role of SDOH in quality reviews and risk adjustment
Q: How does documenting social determinants of health (SDOH) interact with the reimbursement aspects of quality reviews and risk adjustment?
A: Documenting social determinants of health (SDOH) can influence risk adjustment scores, quality metrics, and reimbursement while providing a more complete picture of patient complexity and care needs. As the reimbursement landscape continues to shift toward pay-for-quality models, capturing a comprehensive and accurate representation of each patient's acuity, including SDOH factors, has become increasingly important.
Many value-based payment models include components that are risk adjusted. For example, Hierarchical Condition Categories (HCCs) are used by CMS to risk-adjust payments in Medicare Advantage, which means that more accurately documented chronic conditions can lead to more appropriate reimbursement. Capturing both acute and chronic conditions, along with the SDOH factors that may be exacerbating them, helps paint a fuller picture of patient acuity, which in turn supports more accurate risk adjustment.
The core function of CDI is to ensure that everything a patient was treated for is accurately captured. CDI can help ensure that SDOH factors such as housing insecurity, limited social support, and challenges with medication management are accurately documented and coded. These codes can influence risk stratification and help us to better understand the social complexity surrounding a patient's care. For example, hospitalization may occur because a patient is experiencing barriers to maintaining their medication regimen, whether related to access, affordability, or understanding of their treatment plan — all of which can be directly impacted by SDOH factors. Ensuring this information is accurately documented also gives clinical teams the data they need to adequately care for patients and supports better continuity between inpatient and outpatient settings.
SDOH documentation also plays a critical role in quality reviews. Incomplete SDOH documentation can affect observed vs. expected (O/E) ratios in quality reporting, potentially making a hospital appear to have worse outcomes than peer organizations when it is treating a higher-acuity, socially complex patient population. Accurate and thorough documentation supports fair benchmarking across organizations and ensures that quality metrics reflect the true complexity of the patients being served.
Beyond the DRG methodologies for the inpatient encounter, there is also more comprehensive data being reported for the organization and the hospital, which can impact reimbursement as well. There are also programs such as the CMS Hospital-Acquired Condition (HAC) Reduction Program, which incorporates a PSI 90 component, and the CMS Readmission Reduction Program, which can both be impacted by risk adjustment. Ultimately, accurate SDOH documentation can support both the quality of patient care and the financial integrity of the organization.
Editor’s note: This question was answered by Sydni Johnson, BSN, RN, CCDS, director of clinical documentation and denials education at Banner Health in Arizona. Opinions expressed are those of the author and do not necessarily reflect those of ACDIS, HCPro, or any of its subsidiaries. For questions about this topic, please contact the ACDIS team at info@acdis.org.