A Detailed Guide on HCC Coding

In 2004, the Centres for Medicare and Medicaid Services (CMS) launched the Hierarchical Condition Category (HCC)code set. While approaching its 20th anniversary, HCC coding is becoming more common as healthcare shifts to value-based payment models, a change that has been actively pursued over the last decade. HCC, as it is colloquially known, was created to estimate and possibly predict a patient’s healthcare costs over the course of his or her life. A Guide on HCC Coding requires a long-term perspective on multiple conditions, factors, and determinants that may affect their individual prognosis over many months or years.

HCC codes are directly related to ICD-10 codes – approximately 10,000 ICD-10 diagnosis codes out of 70,000 diagnoses are directly related to at least one of the 86 HCCs. HCC coefficients vary depending on the patient category.

The HCC set assigns risk scores to patients based on demographic factors such as age and gender. There are lot more things to know about the HCC Coding and that’s why here is the detailed guide to give you a right direction and knowledge about such guide on HCC coding:

An Overview of the HCC Model

Based on the patient’s demographics and diagnoses, the HCC model assigns a Risk Adjustment Factor (RAF) score, which is a relative measure of how expensive that patient is expected to be. As healthy patients have a lower-than-average RAF score, revenue from insurance premiums is transferred from healthy patients to patients with higher-than-average RAF scores.

According to the “American Academy of Family Physicians,” “hierarchical condition category coding helps communicate patient complexity and paint a picture of the whole patient,” allowing for appropriate quality and cost performance measurement.

In fact, reporting a comprehensive picture of the risk adjustment factor improves patient score accuracy and, ideally, reduces the need to request medical records or audit providers’ claims.

How does it function?

One of the concepts that must be followed for the HCC risk adjustment model is having an accurate problem list. For years, healthcare organizations have filled EMRs with data, resulting in a large amount of data and, most likely, an inaccurate problem list. To ensure an accurate problem list, remove duplicate and inactive diagnoses and identify key areas for assigning HCC codes and RAF values.

Another requirement of the risk adjustment model is the annual documentation and coding of patients’ chronic conditions. Every January 1, a patient’s risk adjustment factor (RAF) score is reset to zero, so it’s critical to document and code HCC diagnoses yearly to reflect accurate health status.

Why is HCC coding important?

Hierarchical condition category coding is designed to help determine patient care and long-term health complexity while also “painting a picture” of the entire patient. Painting a complete picture of a patient’s health necessitate more than just codes and technology, but also expertise and analysis.

Healthcare professionals, for instance, should be persuaded to review the entire patient record, looking for any potential social determinants of health (SDoH) that could affect the value of the care provided (as in value-based care).

HCCs use data collected from patient encounters that have been notated and coded to estimate predicted costs for individuals over time — in insurance, this could be the next year or more of coverage. These projections are based on the previous 12 months.

HCC’s RAF scores can also be used to calculate risk-adjusted quality and cost metrics by taking into account differences in individual patient complexity, quality, and cost performance, as well as demographic information such as age and medical conditions documented through patient encounters.

Finally, providers who fail to capture specific patient conditions may face lower Medicare reimbursements as HCCs leverage changes to Medicare capitation payments to Medicare Advantage health plans. These payments are based on the anticipated risk of chronic condition enrollees, which is calculated annually using clinically specified ICD-10 codes. Failure to fully capture the patient’s relevant condition and care through proper coding will almost certainly result in significant revenue losses for each patient whose care is not fully documented.

How can 24/7 Medical Billing Services assist you?

Capturing HCC diagnoses across the continuum of care to reflect the total disease burden of a patient population benefits not only the patient but also physicians and payers. To achieve this goal, providers and medical coders must stay current on best practices and be educated on HCC. When done correctly, HCC streamlines the process, resulting in clean claims and quick reimbursements.

24/7 Medical Billing Services holds a team of well-trained and experienced HCC coders who are responsible for assigning appropriate diagnosis codes and CDI specialized to review all clinical documentation for completeness and accuracy. They also ensure thorough risk adjustment evaluation for each record in the best interests of the patient, provider, and payer.

Read more: 10 Reasons To Outsource Your Medical Billing