Risk Adjustment and Hierarchical Condition Category (HCC) Coding

Risk Adjustment and Hierarchical Condition Category (HCC) Coding

Risk Adjustment and Hierarchical Condition Category (HCC) coding is a payment model mandated by CMS in 1997 to estimate future patient costs. Implemented in 2004, it identifies patients with serious or chronic illnesses and assigns a risk factor score (known as a risk adjustment factor) based on health conditions and demographic details. As healthcare transitions towards value-based payment models, HCC coding has become increasingly important.

The risk adjustment factor (RAF) scores utilize patient demographics and diagnoses to determine a patient’s risk score, which predicts their healthcare costs for the current year. This model results in different payment rates for patients within the same practice. The risk assessment data used in these calculations is derived from claims and medical records from doctors’ offices, inpatient hospital visits, and outpatient clinics from the previous year. Numerous factors influence the amount of risk and work needed to maintain a patient’s health, with RAF scores heavily weighted by HCC coding and documentation.

How CMS Uses HCCs for Risk-Based Reimbursement

Medicare uses HCCs to reimburse Medicare Advantage plans based on their members’ health. HCCs are grouped into 86 disease categories, each representing conditions associated with higher-than-average costs. Out of 72,748 ICD-10-CM codes, CMS identified 9,700 diagnoses that contribute to the risk adjustment factor calculation.

Key Hierarchical Condition Categories include:

• Major Depressive and Bipolar Disorders

• Asthma and pulmonary disease

• Diabetes

• Specified heart arrhythmias

• Congestive Heart Failure

• Prostate Cancer

• Rheumatoid Arthritis

• Colorectal, Breast, and Kidney Cancers

How ReportingMD Enhances HCC Coding Through TOM

As healthcare evolves, ReportingMD is adapting to it. Our new program within the Total Outcomes Management (TOM) application emphasizes the importance of HCC coding and risk adjustment factor scores. The HCC-related analytics in TOM provide insights to enhance network and provider performance management concerning CMS and Commercial payers.

Users can view provider-level risk adjustment factor scores from previous and current years and the overall average risk score within this module. Users can drill down to provider-specific reports to see current risk scores, usage of Unspecified HCC DX, and Unsubmitted HCC DX.

ReportingMD’s TOM application also provides patient-level details associated with HCC coding. Users can drill down to the Patient Panel Report from the Provider RAF report, which includes all patients linked to that provider. This report shows the next appointment, number of ER visits, diagnosis codes, unspecified HCC DX codes, unsubmitted HCC DX codes, and patients’ risk adjustment factor scores.

Additionally, the Patient View feature allows users to see unspecified and unsubmitted HCC DX codes, dates of last physical exams, and emergency room visits. This information helps schedule patients for chronic condition management, ensuring accurate risk adjustment factor scores.

Why Accurate Documentation is Crucial for HCC Coding

Providing this information allows users to identify areas needing improvement or education regarding HCC coding. Accurate HCC coding and documentation directly correlate to patient risk adjustment factor scores. Providers must report each patient’s risk adjustment diagnosis based on clinical documentation from a face-to-face encounter. To ensure accurate documentation, providers can use the MEAT acronym:

 M – Monitor signs and symptoms (disease process)

 E – Evaluate (test results, medications, patient response to treatment)

 A – Assess (order tests, educate patients, review records, counsel patients, and

families)

 T – Treat (medications, therapies, procedures)

HCC coding communicates patient complexity and helps predict healthcare costs. Optimizing HCC coding significantly impacts the risk adjustment factor and the revenue received from CMS, the largest single-payer in healthcare. It is essential for the success of the Risk Adjustment program.

The Physician Burnout Crisis and Its Causes

With ReportingMD and our new Analytics HCC Module, clients can significantly impact healthcare outcomes for patients and revenue for their organizations and providers.

The question of physician burnout no longer seems to be a philosophical one. Burnout is occurring for physicians just the way it is occurring in almost all other professions. While I am thinking of this from the physician’s perspective, the same logic can apply to the burnout that all members of medical care teams are experiencing now.

The causes of physician burnout are many, but certainly the complexity of working in the electronic health record and the increasing demands for additional documentation have played a significant part. The amount of documentation required of physicians to satisfy many requirements beyond the original need to document clinical care has increased significantly.

The pandemic only seemed to magnify and accelerate the physician burnout that was already beginning. The pandemic created new challenges as physicians and medical professionals struggled to address patient needs, often without being able to be in the same room as the patient.

Physician burnout has driven an exodus from patient care. As more physicians and care providers retire or leave medicine, the burden on those remaining becomes even larger.

See the Impact Firsthand

Curious how partnering with a CMS-qualified registry can directly improve your performance outcomes? Download the Southlake Orthopedics case study to see how one organization significantly boosted its quality scores and reporting accuracy by working with ReportingMD. When compliance and performance matter, experience makes the difference.

Download the Case Study

How Value-Based Care Can Reduce Burnout

How can we alleviate the growing burden for physicians and care providers? Identifying physician burnout solutions is essential. Fortunately, there are physician burnout solutions that will have additional benefits beyond simply reducing burnout.

The vision of value-based care has been to improve the quality of care, as well as the cost of care. However, it also can be an effective tool to address burnout as well. The traditional fee-for-service medicine we have all experienced, either as a provider or a patient, requires an increasing volume of services in order for the physician’s practice to remain viable. In contrast, in value-based care, the quality of the care provided can be rewarded and compensated for rather than compensating for the volume of care or services. With a value-based orientation, it is no longer necessary to have a full schedule to be successful. By focusing instead on preventative care, wellness, or necessary care, physicians can reduce the stress of needing to keep schedules full and improve patient health and outcomes at the same time.

Tools Physicians Need to Succeed in Value-Based Models

To provide value-based care, physicians need tools different from those used for fee-for-service care. Physicians need to be able to identify which patients need specific services and to understand how well they are addressing the needs of all of their patients and not just the one in front of them at the moment. Physicians need to know how often they are attaining treatment goals or thresholds for all of the patients in the population they care for.

Sustainable Solutions for Burnout Through Quality-Focused Care

Shifting toward value-based care and away from fee-for-service, where there is the constant need to see more and more patients, has the potential to improve job satisfaction for physicians by reducing throughput demands. At the same time, increasing the focus on the quality of care provided and on addressing gaps in patient care will improve the health of patients. Among the most sustainable physician burnout solutions is this shift toward quality-based incentives. Without a doubt, transitioning to value-based care will certainly reduce physician burnout.

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