Risk-Adjustment & Hierarchical Condition
Category Coding: What Are They and Why Do They Matter?
ThisarticleisthefirstofaseriesofarticlesbyAGSregardingRisk-Adjusted andHierarchicalConditionCategory(HCC)Coding.Followalongaswe exploretherequirementsandnuances.
What is the significance of risk-adjustment coding?
Healthcareistransitioningfromafee-for-servicemodeltoavalue-basedcare model.Onesignificantpieceofthevalue-basedcaremodelinvolvesshifting thefinancialriskawayfrompayersandtoproviders.Underthisnewmodel, providerswillbepaidacapitatedpaymentforpatientcare,andprovider organizationswillneedtomanagepatients’costs.Assuch,providersmust haveclear,concise,andcomprehensivepicturesoftheirpatients’healthand medicalconditions.
ThedeploymentandrefinementofICD-10overthelastdecadehaveallowed formoredetailedcoding,providingamorecomprehensivepictureofpatient
health.TheobjectivenowistocodepatientmedicalrecordsusingtheICD-10 codesetsaccurately.
Risk-adjustmentcodingisanend-to-endcodingsystemthatisusedbypayers toforecastmedicalcostsbypatient,specificallypatientswithcomplex medicalconditionsandmultiplechronicconditions.Providersreceivehigher payerreimbursementsforpatientsrequiringmoreoftheproviderstimedue tothecomplexityofmedicalconditionsundervalue-basedcaremodel.
What is value-based care’s role in risk-adjusted coding?
Value-basedcaremodelswithcapitatedpaymentswillcontinuetogrow.RiskadjustmentcodingandHCCshelppayersforecastannualcostsforindividuals withcomplexmedicalconditionsormultiplechronicconditions,creatinga capitatedannualreimbursementamountunderthevalue-basedcaremodel. Again,thefinancialrisktransitionstotheprovidersforpatientcare.Ifthe providerorganizationsproperlydocument,alignevidence,andcodecorrectly, theirreimbursementswillbehigher.
What is Hierarchical Condition Category (HCC) coding?
HCCcodingisarisk-adjustmentmodel,originallycreatedbytheCentersfor MedicareandMedicaidServices(CMS),tohelpinforecastingmedicalcostsfor patientsover65withmorecomplexhealthcareneeds.Thisisknownasthe CMSHCCmodel.TheDepartmentofHealthandHumanServices(HHS)has expandedonthisbycreatinganewmodel,basedonasimilarscoring mechanismandcategorystructurebutforthegeneralpopulation.Thisis knownastheHHSHCCmodel.Bothmodelsidentifypatientswithseriousor chronicillnessesandassignriskfactorscoresbasedonhealthand demographicdetails.
TheCMSmodel(v24)has86HCCgroupcategories.Someofthemostcommon HCCsinclude:
• Majordepressiveandbipolardisorders
• Asthmaandpulmonarydisease
• Diabetes
• Specifiedheartarrhythmias
• Congestiveheartfailure
• Breastandprostatecancer
• Rheumatoidarthritis
Oftheapproximately70,000ICD-10-CMcodes,about9,500ofthemmapto86 HCCcategories.
Challenges Providers Face with HCCs
ThechallengewithHCCsistheend-to-endcaptureofclinicaldocumentation anddata,withsupportingclinicalevidence,andthespecificrequirementsas definedbyCMSandHHS.ThencodingthatdetailusingappropriateICD-10 HCCcodes.Theonusfallstoproviderstoaccuratelydemonstrateandprovide detailedrecordsofpatienthealth.ThevariousHCCICD-10codesaregathered andassessedusingaRAFscore.Themorechronicconditions(withproper documentationandsupportingevidence),thehighertheRAFscore.This deeperassessmentofpatienthealthprovidesallparties-payers,providers,
andhealthcareorganizations–anaccurateviewofpatienthealthandrisk. HCCcodingallowsproviderstoforecastcostsforhigh-riskpatients appropriately.
Thefutureofhealthcarespendingwillrelysignificantlyonriskadjustment modelsbecauseitallowsallpartiestoforecastpatientcarecostsacrossthe higher-riskpopulation,aligningtopopulationhealtheffortsandhelping providerorganizationsandpayerspredictcosts.
How Do HCCs Impact Reimbursement?
HCCsdirectlyimpacthealthcareproviders’reimbursementsfrompayers. Primarycarephysicians,familymedicinephysicians,specialists,and internistsoverseeingcomprehensivepatientcareallmanageHCCs.Providers managingpatientswithHCCconditionsrequiremoretimewiththepatients. Becauseofthis,theRAFscoreprovidesadditionaltimetosupportthose patients’needs.ProvidersmanagingpatientswithhigherHCCscoresare reimbursedathigherratesdeterminedbythesescores.
Ifprovidersandhealthcareorganizationsdon’tdocumentandinclude evidencewithproperlycodedHCCencounters,theywillnotreceivethe additionalreimbursementamountsfortheirHCCpatients.Codersmust documentwithgreatprecisionandspecificity.Doingsocandramatically impactreimbursements.
The Role of AI in HCC Documentation
ThecombinationofAIandothertechnologyadvancements,suchascomputerassistedcodingplatforms,arehelpingtoensuretheproperidentificationof conditions,documentation,andcoding.Whenevaluatedforqualityassurance, thesetechnologiesrarelycontainerrors.Additionally,thesetoolscan:
• Helpidentifymissingdocumentationorevidence
• RecommendappropriateHCCICD-10codes
• Assistwiththemanagementofqualitymetricsandahostofotherneeds providerorganizationshave.
IfyouareinterestedinlearningmoreabouthowAGSHealth’sAI-enabled computer-assistedcodingplatformandhigh-qualityservicescanhelp improveyourHCCdatacapture,contactustoday.
JointhewebinarbyEricMcGuire,SVPofCodingServicesatAGSHealth,to LearnmoreaboutriskadjustmentandHCCcoding,includingthedifferences betweentheCMSandHHSmodelsandwhentheyareapplied.
Source of content: Risk-Adjustment & Hierarchical Condition Category
Coding: What Are They and Why Do They Matter?