HCCs in Medical Practices | Risk Diagnosis Coding

What are HCCs and why do I need to know about them?

Hierarchical Condition Category (HCC) is a coding system developed by Medicare to pay Medicare Advantage Organizations  based on demographics and the disease burden of the beneficiaries. It is a method or predicting future costs.

The CodingIntel Guide to Hierarchical Condition Categories provides a comprehensive list of HCC and Risk Adjusted Diagnosis Coding resources available on CodingIntel.

With the shift from volume to value, many medical practices joined Accountable Care Organizations (ACOs), or are participating in Advanced Payment Models (APMs) or have negotiated risk-based contracts with their commercial payers. In these instances, the medical practice continues to be paid for individual services based on the CPT^® code submitted on the claim form.

However, there is an end of contract year adjustment based on the cost of caring for the panel of patients, quality metrics and the HCC score. Using a measure of how sick a population of patients is normalizes the risk. Commercial payers may use a proprietary system rather than HCC coding. This post will describe HCC coding because it is used by many payers. But the principles of risk adjusted diagnosis coding are the same whether the payer is using HCCs or their own proprietary system.

The first factor in developing a risk score for an individual patient is demographics.

Obviously, medical practices don’t control the demographics of their patients. The demographic factors included in the HCC calculation our age and gender, whether the patient is living at home or in an institution, if the patient has end stage renal disease (ESRD) and if the patient is dually eligible for both Medicare and Medicaid.

The second factor is the measurement of that disease burden for that individual patient, and the entire panel

This includes diagnosis codes that were submitted in the calendar year on inpatient claims, outpatient claims, physician services, and certain other professional claims. It does not include diagnosis codes submitted on diagnostic tests.

Follow ICD-10 rules

Medical practices should follow ICD-10 rules in selecting codes in the assessment section of the medical record that are transferred to the claim form.

This rule in particular is important in risk diagnosis coding.

“Code all documented conditions, coexist at the time of the visit that require or affect patient care or treatment.”

The requirement does not say that that individual medical practitioner is treating the condition. The requirement is that conditions which affect the care or treatment of the patient should be reported.

Example:

A patient presents to urgent care with a terrible case of poison ivy and diabetes. The physician notes in the assessment that the patient’s blood sugar spike when they were prescribed prednisone in the past, and because of the patients diabetes, the physician is not prescribing steroids for the poison ivy. The patient’s diabetes affected the care of the poison ivy. The physician should report poison ivy in the first position on the claim form and diabetes in the second position.

What else should I know about HCCs?

Specificity

Although it is a laudable goal to report all diagnoses to the highest degree of specificity, it is critical to be specific when reporting serious chronic conditions. If the code has the word with in it, “with bleeding,” “with ulcer,” or “with spasm,” and that describes the patient’s condition, use the most specific condition that describes the manifestation or complication.

Status Codes

There are only a few status codes that have a risk adjustment factor assigned to them.

These include being HIV-positive, morbid obesity, long-term current use of insulin, and patients with an artificial opening such a colostomy.

Conditions which no longer exist

ICD-10 also states

“Do not code conditions which know longer exist.”

In the risk based contract, this is a compliance issue.

Current conditions vs. Personal History

Medical practices should pay attention to the rules related to coding malignant neoplasms versus personal history of a malignant neoplasm. If the patient has a history of stroke but is not currently having a stroke, Report on either personal history of a cerebral attack or a code from category I69, sequelae of cerebrovascular attack.

Remember to report these conditions once in a calendar year when they are assessed by the medical practitioner.

Additional resources

• HCC coding for Hypertension quick reference sheet
• Guide to Hierarchical Condition Categories – a comprehensive list of HCC and Risk Adjusted Diagnosis Coding resources available on CodingIntel.

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