For the uninitiated, HCC coding is the application of risk-adjustment models to estimate the future costs of a patient. It is used to set the capitated rate for a patient, thereby reducing the number of required medical records and audits of claims. HCC coding simplifies the reimbursement process by allowing providers to submit clean claims and receive fast reimbursements. Before the implementation of risk-adjustment models, a refund was based on demographic factors. Since cost varies by patient type and condition, the risk-adjustment model evaluates patients on a level playing field. Ultimately, this makes reimbursements more efficient.
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Hierarchical condition category (HCC) coding is a risk-adjustment model.
The HCC model is an essential tool for health care organizations, which can use the data to understand patients’ complexity and communicate patient care. It helps physicians and providers paint a picture of the total patient and provides a means of calculating costs, quality, and performance. In addition, the model helps healthcare organizations improve their financial health by identifying the most likely patients to require disease management.
HCC has many potential benefits for healthcare organizations, including an increased chance of lowering costs, more accurate documentation, and higher reimbursements. With this, it is important to consider what is HCC coding? understanding today’s risk adjustment model to understand the process. To ensure that HCC coding is correct and compliant, organizations should obtain accurate data on the population served by their organization. They should then form a team to improve documentation and HCC coding, including clinical staff, Accountable Care Organization team, operations, and clinic managers.
HCC coding is used to estimate a patient’s future costs to the health care system.
A patient’s HCC coding is an essential part of the value-based risk adjustment model that CMS uses to compensate health plans for the care they provide. It provides a formalized way to code population health segments based on diagnoses and costs. Before developing HCC coding, payers allocated funds to their members based on the patients’ demographics and health status. In the past, this was unreliable as the health care costs of two patients in the same practice could be quite different.
The HCC model categorizes patients according to their underlying chronic health conditions. The model is based on ICD-10 codes. This system prioritizes chronic diseases because they impact a patient’s future health care costs. It also excludes diagnoses that are not clinically significant, non-diagnostic, or definitively treated. However, if a patient has a history of several chronic conditions, their HCC coding is essential to estimate their future healthcare costs.
HCC coding is applied prospectively to the capitated rate.
Medicare Advantage plans have long used the HCC coding system to make their payments. The system uses prospective data, including primary medical conditions, demographic information, and estimates of patient encounters during the previous twelve months to adjust their capitation payments for health care services. CMS uses both the ICD-9-CM and ICD-10-CM codes to calculate the risk scores and adjust the Medicare capitation rates.
CMS developed a model that uses data from the 1999-2000 Medicare five-percent sample FFS. This model is prospective, meaning that diagnoses collected in the base year are used to estimate future expenditures. This method also eliminates the data lag of the PIP-DCG model, which finished six months before the payment year and published its final capitation rates by January 1.
HCC coding is not intuitive.
CMS requires healthcare providers to identify and document qualifying conditions for risk adjustment coding each calendar year. Accurate documentation is vital to ensure proper coding and appropriate reimbursement. Even though HCC coding may not be intuitive, it is necessary to comply with these requirements to receive fair compensation for quality care. Healthcare organizations should optimize their data, EMR, analytics, education, and compliance programs to maximize reimbursement.
In addition to training providers on the complexities of HCC coding, they should incorporate the process into their daily encounter workflow. For example, they can activate the ACO identifier within their EMR or trigger HCC diagnosis alerts based on past coding. This approach can increase coding accuracy and improve the quality of care for a complex patient population. In addition, by building inappropriate documentation and coding, a clinic can generate a more accurate report on its performance.
CMS requirements for HCC coding
Care coordination teams can identify patients with high-risk chronic conditions and share this information with physician team members during the morning prep process or EMR alerts. As a result, care coordination teams are better prepared to diagnose and treat patients and can also help providers submit accurate claims. HCC coding is crucial for CMS risk adjustment models because inaccurate diagnoses can affect patient care and ongoing reimbursement. Care coordination teams should evaluate their coding processes and incorporate technology to make it easier.
The new CMS HCC coding requirements require all health care providers to document high-risk conditions for patients. HCCs are vital components of Medicare capitation payments, which are based on the anticipated risk of enrollees with chronic conditions. In addition, inaccurate or incomplete coding can lead to lower Medicare reimbursements, amounting to substantial lost revenue. Therefore, HCC codes must be documented with the highest specificity.