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 based on health conditions and demographic details. As healthcare transitions towards value-based payment models, HCC coding has become increasingly important.
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, in-patient 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.
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 RAF calculation.
Key HCC categories include:
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 RAF 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 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 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 scores.
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 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:
HCC coding communicates patient complexity and helps predict healthcare costs. Optimizing HCC coding significantly impacts the revenue received from CMS, the largest single-payer in healthcare. It is essential for the success of the Risk Adjustment program.
With ReportingMD and our new Analytics HCC Module, clients can significantly impact healthcare outcomes for patients and revenue for their organizations and providers.