Things Your Mother Never Told You About HCC: Version 23

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Original story posted on: November 12, 2018

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The 2019 CMS risk adjustment model is version 23.

The Centers for Medicare & Medicaid Services (CMS) released, in April, the latest update to the CMS-hierarchical condition category (HCC) Risk Adjustment Model (V23).  It applies to payment year 2019.  As Medicare Advantage is a prospective payment system, that means care provided to Medicare Advantage members and claims submitted in 2018 will be mapped to the new V23. 

Since this is a government program, it obviously isn’t as simple as that.  The risk adjustment factors (RAF) for dates of service 2018 will be determined by a blend of 75% V22 and 25% V23.  Over the next few years, there will be a transition to full V23 mapping for the RAF.  That doesn’t take into account normalization factors, coding intensity adjustments, or the transition to encounter data, but those are for another time.  

So what are the differences between V22 and V23?  There are several.

V23 has expanded the number of HCCs to 83 from the 79 in V22.  No HCCs were dropped between V22 and V23, so this represents an increase of 4 HCCs.  The number of mapping ICD10 codes has also increased to 9,592 in V23 from just over 9,500 in V22, and no ICD10 codes were dropped between V22 and V23.

The vast majority of the additions in both HCCs and ICD10 codes are in the mental health section.  The one exception is chronic kidney disease, stage 3 (CKD3).  CKD3 (N18.3) is the sole ICD10 code in the new HCC 138.  It has a relatively low coefficient value of 0.068 (community, non-dual, aged). 

The mental health section has seen pretty significant change between V22 and V23, both in the name of the HCC, number of HCCs and the number of mapping ICD10 codes. This is all a little tedious, but it is important, so try to hang on!

HCC 54 (Drug/Alcohol Psychosis in V22) is now titled Substance Use with Psychotic Complications in V23.  The number of mapping diagnoses has not changed at 108 ICD10 codes.
 
HCC 55 (Drug/Alcohol Dependence in V22) is changed somewhat, and now titled Substance Use Disorder, Moderate/Severe, or Substance Use with Complications.  There are now 305 mapping diagnoses, up from 270 in V22.  The additional codes reflect diagnoses of accidental or undetermined overdose, an unfortunate reflection of the reality of the substance abuse epidemic in the United States. 
 
HCC 56 (Substance Use Disorder, Mild, Except Alcohol and Cannabis in V23) was not used in V22.  These reflect substance abuse that is uncomplicated or in remission.  There are 14 ICD10 codes in HCC 56.
 
HCC 57 (Schizophrenia in both V22 and V23) is unchanged in mapping ICD10 codes and number of codes.
 
HCC 58 (Major Depressive, Bipolar, and Paranoid Disorders in V22) has been changed to Reactive and Unspecified Psychosis in V23.  There are 3 ICD10 codes in this HCC in V23.
 
HCC 59 (not used in V22) is now Major Depressive, Bipolar, and Paranoid Disorders in V23.  There are still 815 ICD10 codes in this category, although the HCC designator number has changed.
 
HCC 60 (Personality Disorders) is a new category in V23 and not found in V22.  There are 16 ICD10 codes in this category.
 

With new and modified HCCs, there has also been a change to the hierarchy table:

Jonakin Image1

 (Above taken from page 86 in the CMS 2019 Announcement)

Even though the above was a little tedious, it is important to stay abreast of the changes.  Similar to prior years, coding intensity adjustments may result in minor coefficient changes – up or down – in most codes.  The most impactful changes in V23 are in diabetes with complications (acute and chronic) which had about a 3½ % decrease in coefficient.  Even more impactful was in the coefficient for Major Depressive, Bipolar, and Paranoid Disorders which saw about an 11% decrease.  To maintain budget neutrality, coefficients are adjusted, usually yearly, to maintain a national average of RAF at 1.000.  Hence, it is not surprising that adding HCCs would potentially lead to a decrease in some coefficients. 

Some things haven’t changed in the transition from V22 to V23.  There must still be documentation which supports the diagnoses for a Medicare Advantage member.  There must be a face-to-face encounter with an eligible provider that generated the documentation. 

Documentation and diagnoses are determined by the calendar year, and as of January 1 of every year, all HCC diagnoses must be reconfirmed.  Yes, that lower limb amputation from last year is presumed to have re-grown, much like the tail of a salamander.  

None of us wishes to “Guild the lily” as the Bard would say.  However, only by being specific, accurate and complete in documentation and diagnosis can we appropriately represent the illness burden of our population and thereby receive correct financial support for their care.


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William L Jonakin, MD, CPC, CRC

Dr. William Jonakin has had a career spanning several areas:  pediatrics, emergency medicine, urgent care, and general practice.  He has always been interested in the business of medicine, and most recently the shift from volume to value.  He is the Medical Director for Medicare Advantage and Risk Adjustment at St. Luke’s Health Partners, a financially and clinically integrated network in Southwest Idaho.  He is also the principal in Clinical Discernment, LLC, a consultancy focused on the accurate representation of the illness burden of a population.  Dr. Jonakin is board certified in Pediatrics and is also a Certified Professional Coder and Certified Risk Adjustment Coder.

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