Risk Adjustment and HCC Coding – A Look at Best Practices

by | Published on Feb 23, 2021 | Medical Coding

Risk Adjustment and HCC Coding
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The main aim of Hierarchical Condition Category (HCC) coding is to help “communicate patient complexity and paint a picture of the whole patient”, according to the American Academy of Family Physicians. Correct HCC coding enables better health management and helps proper assessment of quality and cost performance for accurate reimbursements from Medicare Advantage plans. Non-adherence to the risk adjustment and coding requirements for Medicare Advantage can adversely impact practice/hospital revenue.

Risk Adjustment and HCC Coding

People with chronic health conditions represent a relatively high risk to insurance companies. Risk adjustment is a method to offset the cost of providing health insurance for such individuals. Risk adjustment models use a person’s demographic data and diagnoses to determine a risk score, which is a relative measure of the costs to insure that person. In a risk adjustment model, the payment rate for each patient depends on a variety of factors that determine the amount of risk/work involved to provide care for the patient. For instance, a patient with less serious health conditions could be expected to have average medical costs for a given time, while a patient with multiple chronic conditions would have higher than average health maintenance costs.

There are various risk adjustment models. The Centers for Medicare & Medicaid Service (CMS) uses the Hierarchical Condition Category (HCC) method to calculate risk scores. HCC relies on ICD-10 coding to identify a patient’s health conditions and assign a risk score. Each HCC is mapped to an ICD-10 code. There are more than 70,000 ICD-10 codes. CMS has released the initial ICD-10 Mappings and Software for 2021 and the HCC model includes 9,757 ICD-10 codes with 86 HCC categories.

Common HCC Codes

HCC 9 Lung and other Severe Cancers
HCC 11 Colorectal, Bladder and other cancers
HCC 12 Breast, Prostate, and Other Cancers and Tumors
HCC18 Diabetes with chronic complications
HCC 19 Diabetes without complications
HCC 22 Morbid obesity
HCC 23 Other Significant Endocrine and Metabolic Disorders
HCC 27 End stage liver disease
HCC 40 Rheumatoid arthritis
HCC 59 Major Depressive, Bipolar, and Paranoid Disorders
HCC 77 Multiple Sclerosis
HCC 79 Seizure Disorders and Convulsions
HCC 85 Congestive Heart Failure
HCC 96 Specified heart arrhythmias
HCC 111 Chronic Obstructive Pulmonary Disease

Key Considerations for Accurate HCC Coding

  • Appropriate capture and documentation of HCC codes for patients is essential for determining accurate risk adjustment scores.
  • All chronic conditions should be monitored. CMS requires that all qualifying conditions be documented at least once a year.
  • Physicians must thoroughly report a patient’s risk adjustment diagnosis based on clinical medical record documentation from a face-to-face encounter.
  • The patient medical record should be coded accurately and accompanied by supporting documentation about the status of each condition.
  • To capture the most accurate HCC code, physicians must document all active chronic conditions including conditions that are relevant to the patient’s current care, i.e., the diagnoses being monitored, evaluated, assessed/addressed, or treated – M.E.A.T.
  • Each diagnosis should have an assessment and plan, and treatment and level of care must be acceptable.
  • Documentation linked to a non-specific diagnosis, as well as incomplete documentation, can negatively impact patient care and also reimbursement for the services rendered.

Best Practices for HCC Coding

  • Educate Providers: Physicians should be educated on how risk-based contracts work and the importance of HCC coding and the need for proper documentation for patients with chronic conditions. Clinic staff should also be educated about the tools and workflows for patient management and reporting.
  • Identify most Frequently Encountered Patient Conditions: Practices should be familiar with the most prevalent HCCs, identify the codes most relevant to them, and ask physicians to focus on these conditions (www.healthcatalyst.com).
  • Prepare for each Patient Visit: When seeing complex HCC patients, physicians should prepare in advance of the appointment. This will help them document and address chronic conditions more accurately and document their findings in the medical record.
  • Prepare an Accurate Problem List: Healthcare organizations need to optimize their EMR and ensure an accurate problem list by removing duplicative and inactive diagnoses, and using a diagnosis preference list to include HCC suffix codes and RAF values.
  • Document Chronic Conditions even if not Treating them: Even if the physician is not seeing a patient for a chronic condition, it should be documented. For instance, if an orthopedist is treating a patient for a knee condition and the patient has diabetes, the physician should document diabetes in the medical record as it will affect the patient’s care plan (www.healthitanswers.net).

When done correctly, HCC coding allows for better patient management and appropriate reimbursement from payers. Expert medical coding services can go a long way in helping providers achieve this goal. Medical coding specialists stay up to date on HCC and best practices and can ensure that the correct diagnosis codes are reported on claims along with complete clinical documentation. Partnering with an expert medical coding service provider can ensure appropriate reimbursement and reduce risk of denials and audits.

Meghann Drella

Meghann Drella possesses a profound understanding of ICD-10-CM and CPT requirements and procedures, actively participating in continuing education to stay abreast of any industry changes.

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