The risk adjustment phase-in for Medicare Managed Care Organizations (MCOs) was completed in 2007. Medicare Advantage was created in 1997. Chronic and cumulative “hierarchical condition categories” (HCCs) form the risk adjusted reimbursement model.
Physician reimbursement has been fee-for-service. Patients pay doctors. Under this structure, CPT codes and their relative values determine reimbursement, and ICD-9 diagnostic codes support medical necessity. Medicare Advantage HCC flips this. With 100% risk adjustment, ICD-9 diagnostic codes now drive CMS payments to MCOs for Medicare Advantage members.
3,000 ICD-9 codes can adjust risk, but only 70 HCC groups. Clinically related diagnoses with similar cost-of-care implications are grouped. Physician claim forms provide 80% of RAPS diagnoses. The RAPS generates a Risk Adjustment Factor (RAF) to identify each patient. The most severe disease manifestation determines payments, which are heavily influenced by historic chronic disease care costs. Comorbidities affect RAF and HCC determinations and MCO reimbursement.
MCOs can correct incomplete medical records by looking backward. This involves reviewing patients’ medical records for evidence of any of the 3,000+ unreported diagnoses (unreported because they may not have been medically necessary for a reported service).
The Coding Network can help your MCO review triaged medical records quickly and cost-effectively. Importantly, we can provide on-site provider medical record documentation education to teach them thorough and accurate diagnostic coding and the need to see new members quickly to accurately establish their RAFs. This avoids waiting a year or more for retrospective audits to correct RAF and underpayment.
HCC Title/Description RAF (weight)
HCC 1 HIV AIDS 0.335
HCC 2 Septicemia, Sepsis, SIRS & Shock 0.352
HCC 6 Opportunistic Infections 0.424
HCC 8 Metastatic Cancer & Acute Leukemia 2.659
HCC 9 Lung and Other Severe Cancers 1.024
HCC 10 Lymphoma and Other Cancers 0.675
HCC 11 Colorectal, Bladder, & Other Cancers 0.307
HCC 12 Breast, Prostate & Other Cancers & Tumors 0.150
In bold are HCCs for neoplasms, or cancers. Meaning that if a patient has HCC 12 (breast cancer), HCC 11 (colon cancer), and HCC 8 (metastatic cancer), the risk adjustment payment is made to the highest risk factor for that group or category, so only HCC 8 would be reimbursed.
Complete and accurate coding is a priority in the healthcare revenue cycle due to reimbursement compliance concerns, despite the fact that coding audits have been a part of healthcare for more than 50 years. Correctly mapping diagnoses and procedures to ICD-10-CM and HCCs requires detailed clinical documentation.
A coding audit has many advantages, including the following:
- Finding ways to enhance the precision of clinical documentation and coding
- Preventing and fixing regulatory scrutiny and compliance risks
- Helping out with instruction (by making mistakes)
- Improve provider relationships
- Promoting compliance
- Optimizing workflow and process
- Increased revenue and reimbursement
- Overall data improvement for Risk Adjustment, Pay-For-Performance, Quality and
Safety Metrics, Healthcare Surveillance, Disease tracking, and Research. - Treating coding audits as “projects” with a beginning and end can boost efficiency.
- This requires planning, communication, execution, reporting, corrective action, and next
steps for any HCC coding audit.
Passing the HCC Audit: What you need to know
CMS calls HCCs a risk adjustment model that calculates risk scores to predict healthcare costs. This predictive model uses medical record documentation and submitted ICD-10-CM diagnosis codes for plan enrollees to adjust capitated payments to providers based on beneficiaries’ health. CMS and its contractors audit CMS reimbursement methodologies, including the HCC Risk Adjustment Factor platform.
Audit tips
Consider data submission for the HCC Risk Adjustment Data Validation (RADV) audit in parts.
For audit success, read this.
Follow the rules
Most HCCs are chronic conditions (a few acute conditions qualify) that the provider documented with ICD-10-CM diagnosis code(s) on the claim form. In the HCC system, ICD-10-CM diagnosis codes group clinically similar patients into the same group (HCC). The structure is then divided into groups with similar predictive healthcare costs for beneficiaries. Over 9,500 ICD-10-CM diagnosis codes map to one or more of the 79 HCC codes in the CMS-HCC Risk
Adjustment model. ICD-10-CM codes can represent two diagnoses or a diagnosis with a complication, so they can map to multiple HCCs.
HCCs depend on accurate medical record-based ICD-10-CM diagnosis coding. Coding guidelines:
- ICD-10-CM coding assignments should follow the fiscal year’ Official Guidelines for Coding and Reporting.
- Outpatient service coding and reporting instructions are in Section IV. Section I covers conventions, general coding guidelines, and chapter-specific guidelines for outpatient and professional fee coding for physicians and non-physicians.
- Section IV of the guidelines requires that all documented conditions be directly “relevant” to or “affect” the encounter. Each face-to-face visit must be documented, including history of present illness (HPI), examination, and medical decision making.
Section IV, sub-J:
- Code all documented conditions that coexist at the encounter/visit and affect patient care, treatment, or management.
- Avoid coding treated conditions. History codes (Z80–Z87) may be used as secondary codes if the condition or family history affects current care or treatment.
- Section IV, subsection I allows chronic diseases to be coded and reported as often as the patient receives treatment.
Document MEAT
HCC coding is only as good as medical record documentation. As HCCs evolve, best practices for documentation follow the MEAT culture, which auditors use to describe the four requirements for complete and accurate documentation:
Monitor patient symptoms, disease progression, and regression;
- Test results, medication efficacy, treatment response;
- Assess/Address—ordering tests, discussion, reviewing records, counseling;
- Treat—provider-ordered medications, therapies, and other modalities
- Physicians and auditors can use the MEAT acronym as a general guideline, but it is not
regulated. To comply, use official guidelines and regulations.
Coding and Auditing for HCC Compliance: An Overview
Insurance companies no longer charge healthy patients who rarely visit the doctor less and frequently ill patients more. The ACA. It provides affordable health coverage to everyone.
HCC, a risk adjustment model, allows this. Since Medicare Advantage Plans started requiring RAF scores for reimbursement, this model has gained popularity. For compliance and fair reimbursements, coding leaders and commercial payers must understand this model.
Classification of Diseases in a Hierarchy
CMS reimburses Medicare Advantage plans based on member health using HCCs. Patients’ predicted cost expenditures are adjusted based on health status and demographics. Risk assessment data is based on claims and medical records from physician offices, hospitals, and outpatient clinics.
Medcare MSO
If you’re looking for reliable medical billing services in the United States, look no further than Medcare MSO. Our experienced team at Medcare MSO has developed dependable medical billing and coding solutions to assist healthcare providers in increasing their income.
References:
References: Medicare Advantage Rates & Statistics. CMS. (n.d.). Retrieved from
https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats
References: Fact sheet 2022 Medicare Advantage and Part D Advance Notice Part II. CMS.
(n.d.). Retrieved from https://www.cms.gov/newsroom/fact-sheets/2022-medicare-
advantage-and-part-d-advance-notice-part-ii
References: Bigger than billing… exploring the nuances of true revenue cycle management.
Coronis. (n.d.). Retrieved from https://www.coronishealth.com/blog/bigger-than-billing-
exploring-the-nuances-of-true-revenue-cycle-management/
References: Office of Inspector General | Government oversight | U.S. department of …
(n.d.). Retrieved from https://oig.hhs.gov/oei/reports/oei-03-17-00470.pdf
References: Derek Gallimore Posted on December 28, Gallimore, D., & 28, P. on D.
(2022, December 23). How culture audits can help determine the health of your company
culture. Outsource Accelerator. Retrieved from
https://www.outsourceaccelerator.com/articles/culture-audits/
References: Lisa Knowles, R. H. I. T. (n.d.). Passing the HCC audit: What you need to know.
Passing the HCC Audit: What you need to know | COSMOS Compliance Universe. Retrieved
from https://compliancecosmos.org/passing-hcc-audit-what-you-need-know#footnotes
References: HCC coding audits. The Coding Network. (2019, April 4). Retrieved from
https://codingnetwork.com/hcc-coding-audits/
References: Office of Inspector General | Government oversight | U.S. department of …
(n.d.). Retrieved from https://www.oig.hhs.gov/oei/reports/OEI-03-17-00471.pdf
