Medicare is federal health insurance provided to people age 65 or older, younger people with disabilities, and people with end-stage renal disease, or amyotrophic lateral sclerosi (ALS). Medicare Advantage (MA) is a type of Medicare health plan offered by private insurance companies approved by Medicare. Also known as Medicare Part C, MA is available for people ages 65 and older and disabled adults who meet the requirements.

Hierarchical Condition Category (HCCs) codes are medical codes that represent costly chronic health conditions and some severe acute conditions. HCC codes are used by insurance companies to estimate future health care costs for patients and calculate payments to healthcare organizations treating patients covered by MA plans. In a value-based scenario, accurate HCC coding services are crucial to ensure appropriate healthcare reimbursement and enhance patient care.

HCC relies on ICD-10 coding to assign risk scores to patients. Each HCC maps to an ICD-10 code. There are more than 9,700 ICD-10 codes that map to one or more of the 86 HCC codes. The two important elements of HCC coding are:

  • Evaluating the medical record documentation to identify reportable conditions
  • Accurate assignment of ICD-10 codes for these conditions

The American Academy of Family Physicians (AAFP) explains “hierarchical condition category coding helps communicate patient complexity and paint a picture of the whole patient”. Patients with high HCCs are expected to require intensive medical treatment, and clinicians that treat these high-risk patients are reimbursed at higher rates than patients who have low HCCs. For example, if a patient’s chart shows that they have chronic kidney disease, and diabetes, the physician could report a more specific code with a higher acuity score of diabetes with chronic kidney disease.

Documenting HCC codes properly to the highest level of specificity is essential to receive full reimbursement for these patients. HCC coding errors lead to:

  • Lost revenue
  • Compliance issues
  • Value-based care irregularities
  • Auditor scrutiny and penalties
  • Poor patient outcomes

Every MA organization must have proper measures in place to ensure accurate HCC coding. Here are best practices to improve HCC coding accuracy in MA organizations:

  • Include M.E.A.T. to Ensure Specificity of Clinical Documentation: M.E.A.T. is the crux of HCC coding and helps with specificity. In order to support an HCC, documentation must indicate the presence of the disease/condition as well as include the physician’s assessment and/or plan for management of the disease/condition. Using M.E.A.T. criteria is best practice. M.E.A.T. is defined as follows:

    • Monitor-signs, symptoms, disease progression, disease regression
    • Evaluate-test results, medication effectiveness, response to treatment
    • Assess/Address-ordering tests, discussion, review records, counselling
    • Treat-medications, therapies, other modalities

    M.E.A.T. is one of the most effective ways to ensure accurate HCC coding. To learn more, read: M.E.A.T. is at the Heart of HCC Coding and Clinical Documentation.

  • Provider Education: Providers need to be educated on how value-based contracts work, the importance of HCC coding and high quality documentation, and how all of this impacts patient care, payment, and return on investment (ROI). This would encourage them to invest more time in ensuring proper and complete documentation for patients who are sicker or have chronic conditions. Providers need to be educated on the importance of the following:

    • Documenting all cause-and-effect relationships
    • Capturing all complications correctly
    • Clearly linking complications or manifestations of a disease process
    • Documenting all conditions evaluated during every face‐to‐face visit
    • Including all current diagnoses in the current medical decision-making process
    • Reporting all secondary diagnosis correctly
    • Maintaining an accurate problem list by removing duplicative/inactive diagnoses
    • Documenting diagnoses as “history of” or “past medical history” when they no longer exist and are addressed

Quality documentation means creating a complete view of each patient by including specificity of HCC chronic conditions. Complete, accurate patient records include medical histories, procedures, treatments, and chronic conditions. Specificity and accuracy in HCC documentation and coding will lead to accurate, complete documentation of chronic conditions, mode of treatment and lead to correct HCC assignment and payment.

Likewise, organizations must make sure that their coding team is up to date on HCC coding guidelines. They should focus on the most commonly occurring HCC codes in the organization rather than all the 86 HCC categories. Ongoing coding education updates along with audits on coding accuracy is crucial ensure compliance to current standards and practices.

  • Outsourcing Medical Coding to a Specialist: Medical coding companies provide the services of AAPC-certified coders with the expertise required to convert clinical documentation into HCC codes. Solutions provided for MA organizations include:

    • Assignment of HCC diagnosis codes to the highest level of specificity
    • Focused chart review to identify over-coding/under-coding or missing/embedded/suspect codes
    • RADV audit for HCC validation
    • Compliance with official coding rules and CMS risk adjustment reporting guidelines
    • Continuous training programs to update coding team skills
    • Detailed and summary reports

With almost one-third of Medicare beneficiaries enrolled in MA plans, healthcare organizations need to pay attention to the HCC risk adjustment model and ensure that physicians are coding diagnoses correctly for appropriate compensation. Partnering with an experienced medical coding company is the best way to do this. Medical coding specialists stay up to date on HCC coding best practices. Expert medical coding service providers can help physicians ensure error-free HCC coding for better patient management, appropriate reimbursement, and reduced risk of denials and auditor scrutiny.