Using Medical Codes Correctly for Risk Adjustment in the “Value-based” Payment Scenario

Medical CodesA recent article in Neurology Today highlights the importance of accurate Medicare Risk Adjustment / Hierarchical Condition Categories (HCC) coding for physicians practices and RADV audit services for insurance companies offering Medicare Advantage (MA) plans. According to the report, the federal government claims that UnitedHealth Group, the nation’s largest Medicare Advantage (MA) insurer, increased its risk-adjustment payments from Medicare inappropriately by submitting invalid diagnosis codes. The insurer has rejected the government’s claims and said it will put up a strongly defense.

In the Risk Adjustment model, high-cost patients are identified when a health care provider selects a specific set of ICD-10 diagnosis codes or HCC codes. MA plans focus on diagnoses to establish higher reimbursement rates for patients with more serious conditions. An Risk Adjustment Data Valuation (RADV) audit helps insurance companies establish whether the diagnosis codes submitted are supported by the clinical documentation.

Physicians are focused on providing proper patient care and usually find HCC coding complex, tedious, and frustrating. However, as value-based payment gains importance, Risk Adjustment and HCC coding will impact insurance contracting opportunities and physician pay, say experts. Accurate HCC codes provide a complete picture of the complexity of the patient population. In fact, getting smart on HCC codes is crucial for physicians to better manage patients with chronic diseases and receive appropriate reimbursement.

This brings us to the question as to what “accurate” coding means. The Neurology Today report says that there are two angles to this:

  • Providers focus on using codes that reflect M.E.A.T., that is, what they are Monitoring, Evaluating, Assessing or Treating.
  • On the other hand, as the patients with comorbidities are more expensive to care for, using HCC codes for these patients is important to generate a high-risk score, which will lead to higher payments from Medicare.

Neurology Today reportsEric Cheng, MD, FAAN, a neurologist and health services researcher at the David Geffen School of Medicine at the University of California, Los Angeles as saying, “The emerging definition of value is your actual costs divided by your expected costs”. HCC codes indicate expected costs for a given patient, and therefore accurate use of these codes by providers would indicate that are indeed “high-value” physicians.

Specificity is essential for risk adjustment in both documentation and coding. In the risk adjustment model, clinicians should report all present, relevant diagnoses. In accordance with ICD guidelines, a primary diagnosis to describe the main reason for the visit/encounter should be listed along with additional codes to describe any coexisting conditions.” The Centers for Medicare & Medicaid Services (CMS) 2008 Participant Guide for risk adjustment further supports this instruction:

Physicians should code for all documented conditions that coexist at the time of the encounter/visit, and require or affect patient care treatment or management. Do not code conditions that were previously treated and no longer exist. However, history codes may be used as secondary codes if the historical condition or family history has an impact on current care or influences treatment. Co-existing conditions include chronic, ongoing conditions, such as diabetes, congestive heart failure, atrial fibrillation, COPD, etc. These diseases are generally managed by ongoing medication and have the potential for acute exacerbations if not treated properly, particularly if the patient is experiencing other acute conditions. It is likely that these diagnoses would be part of a general overview of the patient’s health when treating co-existing conditions for all but the most minor of medical encounters. Co-existing conditions also include ongoing conditions such as multiple sclerosis, hemiplegia, rheumatoid arthritis, and Parkinson’s disease.

The Hawaii Medical Service Association (HMSA) provides some examples to indicate the importance of specificity in coding and documentation for Risk Adjustment:

  • Atrial fibrillation – 148.91 Afib, NOS risk adjusts, but Cardiacdysrhyrhmia – 149.9 Cardiac dysrhyrhmia NOS does not risk adjust
  • Chronic obstructive bronchitis – J44.9 – COPD, NOS risk adjusts, but Bronchitis – J40m Bronchitis NOS does not risk adjust
  • Pneumococcal pneumonia – J13 – Pneumonia due to S.pneumoniac risk adjusts, but Pneumonia – J18.9 Pneumonia, NOS does not risk adjust

The American Academy of Professional Coders (AAPC) has identified several potential problem areas in risk adjustment that medical coding service providers should be aware of:

  • Medical Codes“History of” diagnoses: It is an error to code or document a past condition as active and to codeas “history of” a condition when that condition is still active.
  • Some conditions like cancer require special consideration regarding “history of” diagnoses. Physicians may continually submit an active cancer code when the cancer is no longer being actively treated. However, coding rules permit coding of cancers as current only when they are being treated by chemotherapy, radiation therapy or hormonal treatment, watchful waiting, or if the patient is too frail for, or refuses, treatment.
  • Stroke codes also have different rules. If a patient has been discharged from inpatient treatment for a stroke, a “history of stroke” code should be used and nota stroke code.
  • Providers should pay attention to list headers such as PMH, active, current, ongoing, etc., and also the manner in which a diagnosis is written out or described. For instance, the use of the word “chronic,” can significantly change diagnosis code selection.
  • Medical coding companies should also be wary of the following potential coding errors for risk adjustment:
    • absence of a legible signature with credential in the record
    • EHR that is not electronically signed
    • the most precise code was not assigned the highest degree of specificity
    • diagnosis codes billed and the actual written description in the medical record do not match
    • the documentation does not adhere to M.E.A.T. criteria
    • chronic conditions are not documented
    • chronic conditions/status codes are not documented in the medical record at least once per year
    • lack of specificity in documentation
    • causal relationship/link is absent for a diabetic complication, or a mandatory manifestation code has not been reported

HSS and CMS review and corroborate risk scores through data validation audits. Mock RADV audit services can help confirm reported diagnoses, ensure HCC validation, and identify coding errors which can affect the overall RAF (Risk Adjustment Factor) score of MA plans. Accurate coding for Medicare Advantage (MA) plans would also ensure clean claims for physician practices.