What is HCC Coding and What Benefit Does it Offer?

Hierarchical condition category coding, often known as HCC coding, is a prediction model for risk adjustment, but it is ultimately so much more than that. The HCC was developed to assess and, to the extent that it is possible, anticipate the costs of providing medical treatment to a patient over the course of that patient’s lifetime. It is necessary to have a long-term perspective and consider a number of different situations, variables and causes that may have an effect on the individual’s prognosis over a period of several months or years.

2004 was the year when the Centers for Medicare and Medicaid Services (CMS) HCC code set was first implemented. HCC coding, which is almost around 20 years old, is becoming more widespread as the healthcare industry moves toward value-based payment models, which is a trend that has been aggressively promoted over the course of the last decade.

There is a one-to-one correspondence between ICD-10 diagnostic codes and HCC codes; around 10,000 of the 70,000 ICD-10 diagnosis codes are directly connected to at least 1 of the 86 HCCs. The HCC coefficients shift depending on the patient group being analyzed. Patients get risk scores based on the HCC set, which map to demographic parameters including age and gender. These risk ratings are used to inform treatment decisions.

In addition to this, HCC coding makes it possible to provide a risk adjustment factor score (RAF) to each individual patient. With risk-adjusted payments, Medicare has to pay less for patients who are healthy and more for sick patients. Therefore, insurance plans cannot generate profits by selecting only healthy patients to join and by eliminating unwell patients from their rolls; instead, insurers generate profits either by providing treatment of a higher quality or at a lower cost.

Read more: What Does Responsible Party mean in Medical Insurance?

RAF scores are intended to serve as a potential indicator of the amount of money a patient will spend on medical treatment. Patients who have fewer health issues than normal generally have medical costs that are lower than average. In a similar vein, a patient who has many chronic diseases would almost certainly have greater use rates and overall healthcare expenses throughout the course of their treatment.

Now, that you are aware of “what is HCC coding”, let us discuss the importance of HCC coding and how the process works.

Importance of HCC Coding

The hierarchical condition category coding system was developed as a method for assessing the level of care required for patients as well as the complexity of their long-term health of the patient. To provide an accurate picture of a patient’s health, you need more than just codes and technology; you also need experience and analysis. For instance, medical personnel should be encouraged to analyze the whole of their patient’s medical records and investigate any relevant social determinants of health (SDoH) in order to forecast outcomes that may have an impact on the value of the treatment that is being delivered.

HCCs make use of the data acquired from the patient visit, which is then notated and recorded, in order to estimate expected costs for people over a course of time. In the context of insurance, this may refer to the coverage for next year or more. These projections were calculated using data from the preceding year.

HCC’s RAF scores can also be used to determine the risk-adjusted cost and quality metrics. These metrics are calculated by taking into account differences in patient complexity, cost performance, quality, and demographic information. This information includes the patient’s age as well as any medical conditions that have been documented through patient encounters.

Healthcare providers who do not adequately record pertinent patient conditions may find that they get reduced Medicare reimbursements as a result of HCCs’ ability to leverage changes in Medicare capitation payments to Medicare Advantage health plans. These payments are determined yearly from clinically defined ICD-10 codes based on the projected risk of enrollees who have chronic diseases. This risk is dependent on the condition of the participants. It is quite probable that substantial revenue possibilities will be missed for each patient whose treatment is not properly recorded due to a failure to capture the relevant condition and care of a patient in its entirety via the use of appropriate coding.

According to the Quality Payment Program offered by CMS, HCCs are the ones that decide how much money to pay for professional services. These include risk adjustments to the metrics included in the cost component of the Merit-based Incentive Payment System (MIPS), as well as incentives for treating complicated patients as part of the MIPS.

How to Process HCC Coding?

How to Process HCC Coding
Source: premierinc.com

ICD-10 requires a greater level of depth and clarity in relation to the particular treatment and circumstances of each patient. For instance, in comparison to earlier versions of code sets, healthcare professionals are now required to do a more in-depth investigation into whether a cytomegaloviral illness is pancreatitis, hepatitis, pneumonitis, or another type of disease. In a similar vein, chronic conditions and the care of those illnesses are vital to HCCs. Some examples of chronic conditions include alcohol abuse (or its remission), amputations, and artificial apertures. Because each of these instances has the potential to act as quality predictors for future healthcare requirements, they are applicable to HCCs and the process of forecasting the health of patients over the long term.

These risk indicators, along with a number of others, are taken into consideration when determining the pay scale for an individual patient. The greater the number of chronic diseases a patient has, the greater the potential danger to the patient’s health, which in turn may have an effect on the value of the treatment that is delivered.

To risk-adjust the payments that it provides via Medicare Advantage plans, CMS utilizes HCCs, as was previously indicated. The Centers for Medicare & Medicaid Services (CMS) provides Medicare Advantage plans with a capitated (fixed charge per patient) amount. Patients who are healthier than the average have an HCC score that is lower than 1.000, while patients who are less healthy than the average have a value that is higher than 1.000.

HCC Success: Some Effective Tips

Many medical professionals do not have access to ICD-10-specific coding instructions, and immediately assign codes at the conclusion of each patient interaction. Some people are not aware of the resources, standards, or encoders that pertain to coding. Another area of worry is while dealing with coders; the more experienced and qualified the coders are, the greater the likelihood of better results being achieved. Gaining success requires a great amount of experience. First and foremost, having a solid grounding in ICD-10 is essential for HCC.

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In order for the processing and navigation of your HCC paperwork, coding, and supervision to go well, scrutiny is also an important factor to consider. These aspects are essential to the upkeep of compliance, precise quality measurements, and financial integrity. Organizations should continue to review areas for improvement to educate, monitor, and evaluate the quality of outpatient documentation and coding as it relates to HCCs. This will help reduce any risks that may be present.

Technology may be helpful in many different aspects of the process. For example, it may make it possible to improve the capture of documentation through the use of computer-assisted physician documentation; it may also make it possible to automate the capture of codes through the use of computer-assisted coding; and it may make it easier to simplify clarification and follow-up through the use of computer-assisted clinical documentation improvement.

On the other hand, it is essential to keep in mind that the contribution of a provider, coder, or CDI expert, as well as the knowledge, insight, and experience obtained through human experience, cannot be replaced by these technologies.

The Bottom Line

The level of specificity included in the supporting documentation is of the utmost significance for HCC coding. In order for HCC to be effective, the provider has to record any and all diagnoses that have an effect on the patient’s assessment, care, and treatment. This includes both co-existing diseases and chronic conditions, as well as therapies that were delivered.

For the purpose of compliance coding, the medical record must include supporting evidence of how the physician monitored, evaluated, assessed, or treated the HCC diagnosis of the patient. CDI experts and coders play a crucial role in risk-based payment approaches by providing an accurate medical narrative about a patient via high-quality documentation and coding.

CDI specialists are able to educate physicians on the best practices for documenting medical information, such as manifestations of a disease process, linking complications, concepts of cause and effect relationships, when to document the “history of” diagnoses and when not to, and other similar topics.

Feel free to write to us if you have any queries or want to know about “what is HCC coding”.

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