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HCC – HIERARCHICAL CONDITION CATEGORY

What is Risk Adjustment Documentation & Coding?

  • Risk adjustment is a tool used to predict health care costs based on the relative risk of enrollees to protect against potential effects of adverse selection.
  • The Affordable Care Act (ACA) includes commercial risk adjustment for small group and Individual plans.
  • Medicare risk adjustment has been in place for Medicare Advantage plans for some time and is part of our Medicare Program Management. Medicare risk adjustment utilizes the Hierarchical Condition Category (HCC) grouping logic in its risk adjustment model
  • For commercial risk adjustment, the U.S. Department of Health and Human Services (HHS) employs the HCC grouping logic used in the Medicare risk adjustment program, but with HCCs refined and selected to reflect the expected risk adjustment population.

Hierarchical Condition Categories

  • Disease groups, organized into body systems or similar disease processes, and are referred to as HCCs.
  • The HCCs used for Medicare and commercial risk adjustment is different.
  • The CMS- and HHS-HCC models include both diseases and demographic factors, called coefficients. There are sets of coefficients for:
  • New enrollees
  • Members of the community
  • Members in long-term care institutions
  • Enrollees with end-stage renal disease
  • The models are cumulative; a patient may be assigned to more than one category.
  • Some HCCs will trump other related conditions (only one HCC in a category may be assigned)

HHS Commercial Risk Adjustment

  • Commercial risk adjustment is one of three new risk stabilization programs established by the ACA to be implemented in January 2014.
  • The program is intended to encourage health plan competition based on quality improvements and efficiency, mitigating the impact of potential adverse selection and stabilizing premiums.
  • Either the state exchange or HHS will be responsible for operating risk adjustment models.
  • The HHS risk adjustment model redistributes money from insurers with healthier patient populations to those with sicker patient populations.

Importance Of Risk Adjustment Coding

  • CMS and HHS require health plans to report complete and accurate diagnostic information on our members.

Currently, roughly 90% of the diagnostic information submitted to CMS comes from provider claims data.

  • Health plans must attest that the reported diagnostic information is correct and accurate.

Health plans do not review 100% of the claims coding and/or clinical documentation generated by providers.

  • Appropriate diagnosis code reporting and complete clinical documentation at the provider level increases the accuracy of member risk scores.

Accurate member risk scores promote consistent contracted provider revenue and competitive member premiums.

Coding & Documentation

  • ICD-10 diagnosis coding rules can be counterintuitive to clinical practice.
  • The pneumonic “MEAT” is used frequently in risk adjustment coding to represent the criteria for capturing a diagnosis code on a particular date of service.

For a diagnosis to be coded on a given date of service, the documentation must clearly state that the specific diagnosis was either Monitored, Evaluated, Assessed or Treated during the face-to-face encounter on that day.

  • Risk adjustment diagnoses must be captured from the notes of an approved provider type like MD, DO, PA, ARNP, Clinical Psychologist, PT, OT,    Audiologist,     DPM, etc.
  • Clinical documentation from the inpatient hospital, outpatient hospital and face-to-face office visits is acceptable for coding and reporting under risk adjustment.
  • Examples of unacceptable documentation sources for risk adjustment coding/reporting include:
    • Superbills
    • Referral forms
    • Encounter forms
    • Patient-only reported conditions
    • Non-face-to-face encounter notes
    • The stand-alone patient problem list 01

All relevant diagnosis codes should be reported at least once per year for each patient (preferably every six months).

  • On January 1 each year, the patient’s diagnosis information is reset in preparation for a new year of diagnosis encounter data.
  • We are able to receive a maximum of 12 diagnosis codes on an outpatient claim.
  • Confirm how many diagnosis codes per claim are allowed in your system and ensure all applicable diagnosis codes are submitted for each patient during the calendar year.

Annual evaluation, documentation and submission of all relevant diagnoses and corresponding diagnosis codes are paramount for:

  • Data validation audits
  • Promoting quality patient care
  • Accurate patient risk score calculation
  • Ensuring appropriate screening tests are received.
  • Ongoing assessment of the patient’s chronic conditions

Common Errors

  • The historical status of a diagnosis is unclear. • The electronic health record was not authenticated.
  • Legible provider signature and credentials are not included.
  • Discrepancies exist between the medical record and the reported ICD-9 codes (Monitor Evaluate Assess or Treat).
  • Chronic or coexisting conditions are not documented or are left out of the clinical documentation for an office visit.
  • The record contains nonstandard abbreviations or up and down arrows to indicate diagnoses.
  • The use of quantifying language in the outpatient setting, (e.g. “Consistent with, probable, possible…”.)
  • Patient status conditions are not evaluated and/or documented at least once a year.
  • A cause and effect relationship between diabetes and diabetic manifestation codes is not sufficiently documented and/or code.
  • The highest degree of ICD-10 diagnosis code specificity not being assigned (4th and 5th digits of ICD-9 codes are not utilized).