Best Practices for Risk Adjustment and HCC Coding

Hello everyone and welcome to our Podcast series. My name is Natalie Tornese and I’m the Senior Group Manager for Outsource Strategies International (OSI). I wanted to talk a little bit about Risk Adjustment and HCC Coding.

00:14 Aim of HCC coding

The main aim of HCC coding is to help “communicate patient complexity and paint a picture of the whole patient”. Correct HCC coding enables better health management and helps proper assessment of quality and cost performance for accurate reimbursements. These reimbursements are related to Medicare Advantage plans. Non-adherence to the risk adjustment and coding requirements for Medicare Advantage can adversely impact practice and hospital revenue.

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 example, 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 a higher than average health maintenance cost.

There are various risk adjustment codes. The Centers for Medicare & Medicaid Services (CMS) uses HCC method to calculate risk scores. HCC relies on ICD-10 coding to identify a patient’s health conditions and assign their 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.

I will include a transcript along with this recording, outlining the common HCC codes.

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

02:11 Important Points to Remember

Some important information to keep in mind is:

• Appropriate capture and documentation of HCC codes for patients is essential for determining accurate risk adjustment scores.
• All chronic conditions must 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 all supporting documentation about the status of each and every 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 –that is known as 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 rendered.

03:20 Best Practices of HCC Coding 

The best practices for HCC coding are –

• Educate Providers: Physicians should be educated on how risk-based contracts work and the importance of HCC coding as well as 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.
• Most frequently encountered patient’s conditions should be identified: Practices should be familiar with the most prevalent HCCs and identify the codes most relevant to them.
• Providers should be prepared for each patient visit: When seeing complex HCC patients, physicians should prepare in advance of the appointment. This will help in document and address chronic conditions more accurately and document their findings in the medical record.
• An accurate problem list should be prepared: 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.
• Chronic conditions should be documented, even if you are not treating them: Even if the physician is not seeing a patient for a chronic condition, it should be documented. For example, 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.

When done correctly, HCC coding allows for better patient management and appropriate reimbursement from payers.

I hope this helps but always remember that documentation and a thorough knowledge of payer regulations and guidelines is critical to ensure accurate reimbursement for the procedures performed.