Updated on: November 30, 2016

HCCs: How to Protect Payments

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Original story posted on: November 14, 2016
It’s so important that we in the healthcare industry continue our discussion regarding the topic of Hierarchical Condition Categories (HCCs), as the risk-adjusted payment models are increasing in prevalence.

The assignment of HCCs and risk adjustment has extended beyond Medicare Advantage plans as a result of the Patient Protection and Affordable Care Act (PPACA), value-based purchasing, and other programs. We need to get a better understanding of what’s at stake and how to protect payment, as these outcomes are affecting not only the insurance plans, but healthcare organizations and providers as well.

Like so many areas of impact in the healthcare arena, the HCCs and risk adjustment scores are fundamentally driven by the documentation in the medical record. And we know that documentation in turn leads to the assignment of the ICD-10 diagnosis codes, which then leads to the assignment of condition categories and HCCs for each patient – or, in insurance terms, the enrollee.

Regardless of which plan or model of HCCs is being utilized, it’s the quality of the documentation that can significantly impact the results of the coding, and therefore the individual patient or enrollee’s risk score.        

At the annual conference of the American Health Information Management Association (AHIMA) last month, during the ICD10monitor live broadcast, my colleague Kim Carr from HRS discussed how clinical documentation improvement (CDI) specialists in many hospitals now have responsibilities extending beyond ensuring that the documentation supports the correct MS and APR-DRG assignment and quality measures. CDI specialists also need to ensure that the specificity and accuracy of diagnoses in the documentation support quality risk adjustment/HCC assignment.

With some of the new payment models, accurate, complete, and specific diagnosis coding will impact the risk-adjustment scores that drive many of the programs (such as Accountable Care) and individual and small group plans, which in turn impacts the payments to the physician for services rendered.

We need to remind providers that there is yet another reason for them to document clinical specificity and avoid using non-specific diagnoses if possible, as many of these do not map to HCC codes and therefore do not carry a risk-adjusted weight. For example, bronchitis, unspecified, for example, when compared to chronic bronchitis, the former has no HCC or risk-adjusted value. 

So, how do we get there? We all know how often organizations struggle to get physicians on board for documentation improvement efforts, and we try to define the “carrot” or the answer to “what’s in it for me” to get the physicians to understand how CDI and coding efforts affect them. Well, this is an area where we can tap into the common denominator, as the HCCs also relate directly to payment models for physicians and their own billing for services.
Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Barbara Hinkle-Azzara, RHIA

Barbara Hinkle-Azzara, RHIA, is the vice president of health information management (HIM) operations for HRS, where she leads client development, coordination, and management efforts. Prior to joining HRS in October 2013, Barbara served as the vice president of HIM solution strategy for Meta Health Technology, a division of Streamline Health Solutions. Barbara was previously responsible for overseeing the operations of the New York City-based Meta division and for defining the strategy for the company’s web-based product line, as well as business development and partner relations.

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