Submitting claims with the right procedure and diagnosis codes is crucial for getting paid correctly. When it comes to Medicare Advantage (MA), payment depends on reporting care for patients with serious, complex conditions. The Centers for Medicare & Medicaid Services (CMS) pays Medicare Advantage Organizations (MAOs) more for patients who have multiple or more severe conditions, since it costs more to care for these patients. The Hierarchical Condition Category (HCC) risk adjustment model helps predict the costs of caring for Medicare Advantage patients, which affects how much healthcare organizations are reimbursed. This highlights the importance of accurate medical billing and coding services to ensure proper payment.
“Hierarchical condition category coding helps communicate patient complexity and paint a picture of the whole patient,” according to the American Academy of Family Physicians. Therefore, accurate HCC coding and risk adjustment are essential for properly measuring quality and cost performance, impacting a healthcare organization’s financial health and ability to deliver quality care. Given the changes CMS is making to HCC coding, having the right support moving forward is more crucial than ever.
Maximizing Practice Reimbursement through HCC Coding
The RAF score is based on both the demographics and the disease risk scores for the patient. The demographic score includes age, sex, residence (whether in the community, skilled nursing facility, or other institution), and disability status. The disease risk score is based on the reported diagnoses (ICD-10 codes) from patient encounters and their corresponding Hierarchical Condition Category (HCC) codes. Accurate mapping of HCCs to ICD-10 codes ensures proper reimbursement and reflects the complexity of a patient’s health status.
Complete clinical documentation and appropriate HCC coding and enhance the accuracy of member risk scores and improve financial reimbursement. Here are some steps to maximize practice reimbursement through HCC coding:
- Adhere to M.E.A.T. criteria to substantiate diagnoses: People with chronic conditions need long-term attention and management. Neglecting to report evaluation and treatment for all conditions assessed at the time of the encounter. The only way a diagnosis can be supported for a face-to-face visit is if each encounter is treated as unique and adheres to the M.E.A.T. criteria:
- Monitor: signs, symptoms, disease progression, disease regression
- Evaluate: test results, medication effectiveness, response to treatment
- Assess/Address: ordering tests, discussion, review records, counseling
- Treat: medications, therapies, and other modalities
- Document all conditions evaluated during each encounter
- Ensure a proper progress note with the HPI, physical exam and medical decision-making process
- Document each diagnosis in an assessment and care plan
- Ensure that each diagnosis provides evidence that the provider is Monitoring, Evaluating, Assessing/Addressing and Treating the condition.
Insufficient documentation impacts the assignment of diagnosis codes, and directly impact the patient’s risk score and physician reimbursement. Documentation for a valid diagnosis must provide evidence of how the condition is monitored, evaluated, assessed, or treated (M.E.A.T.) for it to be captured for risk adjustment. To adhere to M.E.A.T., providers should:
Without M.E.A.T. documented to substantiate the diagnosis, CMS will reject the diagnosis due to a lack of supporting evidence from the provider.
- Code to the highest level of specificity: To ensure a higher risk adjustment factor (RAF) score, the physician should code the patient’s condition to the highest level of specificity. For instance, for a patient with diabetes 2, uncomplicated, the RAF score is .118. However, if the patient has chronic kidney disease (CKD) stage 3 from diabetes, the code for diabetes with CKD -3 should be used, which has a higher RAF score of 0.368. Similarly, diabetes II with neuropathy has a score of 0.368.
- Ensure clear, accurate documentation: Each patient’s demographic information and clinical details should be accurately documented in the medical record. Clear, accurate, legible, and thorough supporting documentation is necessary to support the diagnostic codes assigned. Providers should be cautious not to capture diagnoses from cloned encounters (the practice of copying and pasting information from previous patient visits or encounters into a new record), as this can lead to inaccurate or unsupported documentation.
- Conduct chart reviews: By regularly reviewing charts, healthcare providers can spot discrepancies, incomplete information, or unsupported diagnoses that may affect billing and coding accuracy. This proactive process helps to prevent issues during risk adjustment data validation (RADV) audits, which are conducted to verify the accuracy of data submitted for risk adjustment purposes, such as HCC codes. Accurate chart documentation ensures compliance with regulatory requirements and reduces the risk of financial penalties, claim rejections, or audits, thereby protecting the financial stability of healthcare organizations.
- Ensure consistent HCC capture: CMS expects HCCs to be captured once every 12 months. Therefore, it is important to monitor patients’ HCCs to ensure consistency in reporting. If a patient’s HCCs are dropping, it could indicate gaps in care or failure to accurately document services that were provided.
- Maintain HCCs from a prior health plan if relevant: If new patients already have assigned HCCs from their prior health plan, these should be maintained if relevant to support continuity of care and complete data collection.
- Stay up-to-date on coding: This is crucial for ensuring accurate billing, proper reimbursement, and compliance with regulations. ICD-10 codes are subject to yearly changes and keeping track of these changes is crucial to ensure accuracy in reporting. HCC codes are updated regularly to reflect new medical knowledge, treatments, and diagnostic criteria. Staying up-to-date on HCC coding is essential for ensuring accurate risk adjustment and proper reimbursement in Medicare Advantage and other risk-based payment models.
Partnering with Experts for Accurate and Efficient HCC Coding
The best way for physician practices to stay updated about the changes in CMS’s risk adjustment model, ICD codes, HCC coding and crosswalks, and audit procedures is to partner with an experienced medical billing and coding company.
By regularly reviewing coding guidelines, staying informed about the latest updates and utilizing reliable coding tools, and collaborating with payers, their AAPC certified coders can ensure that HCC codes are properly applied to reflect the true health status of patients. This helps practices avoid claim denials, audits, and potential financial penalties, while ensuring that their patients receive the appropriate care based on their medical complexity.
On their part, providers should ensure that all diagnoses and procedures are correctly coded and supported by appropriate documentation to reflect a complete picture of the patient. This ultimately improves the accuracy and efficiency of medical billing and coding services.
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