HCC Coding-Steps to Maximize Practice Reimbursement

Updated on April 21, 2017
HCC Coding Maximize Practice ReimbursementIn a world of value-based care, the need for quality reporting by physicians is growing in importance. Accurate documentation and HCC coding (Hierarchical Condition Categories coding) is necessary to report medical care for high-risk, high-complexity conditions.

Since 2004, Medicare has used HCC scores to adjust payments to a health plan based on the level of risk the enrollee presents to a plan, with a higher reimbursement for those with more complex health conditions. In other words, as it costs more to care for patients with higher HCC scores, Medicare pays their MA plan a substantially higher monthly capitation payment.

HCCs are based on ICD-10 codes. To generate a risk adjustment factor (RAF) score, the HCC payment system uses demographics (age, sex, institutional status) and ICD-10 diagnosis codes. Therefore, being up-to-date on ICD-10 codes is crucial for success with risk adjustment HCC coding.
People with chronic conditions need long-term attention and management. However, physicians may neglect to show evaluation and treatment for all conditions assessed at the time of the encounter due to high familiarity with the patient. Adherence to M.E.A.T. criteria – Monitor, Evaluate, Assess, Treat – is necessary to ensure proper documentation of diagnoses during a face-to-face visit. Insufficient documentation impacts the assignment of diagnosis codes, and directly impacts the patient’s risk score and physician reimbursement.

Appropriate diagnosis code reporting and complete clinical documentation by physicians increases the accuracy of member risk scores. Here are some HCC coding tips to help physician practices improve reimbursement:

  • Adhere to M.E.A.T. criteria: The only way a diagnosis can be supported for a face-to-face visit is through Each encounter should be treated as unique and adhere to M.E.A.T. criteria
    • Monitor: signs, symptoms, disease progression, disease regression
    • Evaluate: test results, medication effectiveness, response to treatment
    • Assess/Address: ordering tests, discussion, review records, counseling
    • Treat: medications, therapies, and other modalities

    M.E.A.T. is at the crux of risk adjustment. Documentation for a valid diagnosis must provide evidence of how the condition is monitored, evaluated, assessed, or treated (M.E.A.T.) for it to be captured for risk adjustment. To adhere to M.E.A.T., providers should:

    • Document all conditions evaluated during each encounter
    • Ensure a proper progress note with the HPI, physical exam and medical decision-making process
    • Document each diagnosis in an assessment and care plan
    • Ensure that each diagnosis provides evidence that the provider is Monitoring, Evaluating, Assessing/addressing and Treating the condition.

    Without M.E.A.T. documented to substantiate the diagnosis, CMS will reject the diagnosis due to the lack of evidence by provider. When using electronic medical records, providers should take care not to capture diagnoses from cloned encounters.

  • Code to the highest level of specificity: To ensure a higher risk adjustment factor (RAF) score, the physician should code the patient’s condition to the highest level of specificity. For instance, for a patient with diabetes 2, uncomplicated, the RAF score is .118. However, if the patient has chronic kidney disease (CKD) stage 3 from diabetes, the code for diabetes with CKD -3 should be used, which has a higher RAF score of 0.368. Similarly, diabetes II with neuropathy has a score of 0.368.
  • Maintain HCCs from a prior health plan if relevant: If new patients already have assigned HCCs from their prior health plan, these should be maintained if relevant to support continuity of care and complete data collection.
  • Ensure comprehensive documentation: Each patient’s demographic information and clinical details should be accurately documented in the medical record. Clear, accurate, legible, and thorough supporting documentation is necessary to support the diagnostic codes assigned.
  • Adhere to MEAT: To capture a diagnosis code on a particular date of service, documentation should adhere to MEAT criteria: Monitor-signs, symptoms, disease progression, disease regression; Evaluate-test results, medication effectiveness, response to treatment; Assess/Address-ordering tests, discussion, review records, counseling, and Treat-medications, therapies, other modalities.
  • Perform chart reviews: Chart reviews can help identify documentation errors and prevent risk adjustment data validation (RADV) audits.
  • Ensure consistent HCC capture: CMS expects HCCs to be captured once every 12 months. Therefore it is important to monitor patients’ HCCs to ensure consistency in reporting. If a patient’s HCCs are dropping, it could indicate gaps in care or failure to accurately document services that were provided.
  • Stay up-to-date on coding: ICD-10 codes are subject to yearly changes and staying up to date with these changes is crucial to ensure accuracy in reporting.

The best way for physician practices to stay updated about the changes in CMS’s risk adjustment model, ICD codes, HCC coding and crosswalks, and audit procedures is to partner with an experienced medical billing and coding company. The AAPC-certified coders in such companies would be educated on HCCs and up to date on best practices. They will work with healthcare providers to ensure reporting of appropriate diagnosis codes along with complete clinical documentation. Adherence to M.E.A.T. criteria and specificity in coding will significantly improve practice reimbursement under the new payment models.

Outsourcing medical coding to a reliable service provider will ensure accurate HCC codes and complete and accurate documentation to capture the full complexity of the patient, leading to appropriate risk adjusted payment for Medicare Advantage (MA) plans and their aligned physicians. For 2017, the risk adjustment model includes preventive services, which means higher risk scores for plans with healthier enrollees who use preventive services.