Medical Services

Hierarchical Condition Category (HCC) in Healthcare

Recognizing the Hierarchical condition category (HCC) is essential to ensure reimbursement for quality care. This article will provide an overview of HCC codes, what is HCC coding? understanding today’s risk adjustment model, the risk score, and how they impact documentation. This article also includes the benefits of utilizing decision support software for HCC coding. Ultimately, this information will help you optimize your organization’s EMR, data, analytics, and education. You will be better equipped to document your HCC-related diagnoses and receive appropriate compensation for high-quality care by following these steps.

Hierarchical condition category (HCC) coding

Hierarchical condition category (HCC) coding is a risk-adjustment coding system that identifies and categorizes a patient’s chronic conditions based on diagnostic criteria. Developed by the Centers for Medicare and Medicaid Services (CMS), this system has become more popular as healthcare shifts to value-based payment models. Each HCC represents one or more diagnoses of similar complexity and expected annual care costs.

HCC coding also aids healthcare companies in communicating patient complexity and presenting a complete picture of the patient’s health. It also assigns a Risk Adjustment Factor (RAF) score, which helps them measure healthcare resource consumption. Healthcare institutions can also use HCC coding to compute compensation based on their RAF scores. For example, a patient with few severe health conditions is expected to have an average medical cost. In contrast, a patient with multiple chronic diseases is expected to incur more health care costs.

Meaning of HCC codes

HCC coding aims to provide a pathway for payers and regulators, thereby improving patient care by allocating appropriate funds. Coders must review medical records to determine which diagnoses match HCC codes. They must also consider patients’ co-existing conditions when coding. For example, the patient with a missing limb must be recorded each year in a typical case. A simple checklist can help coders avoid pitfalls and maximize the specificity of their HCC codes.

As the ACA market reforms continue to make healthcare more affordable and accessible to all, HCC codes are crucial. These codes assist in calculating reimbursement for Medicare Advantage plans based on the health status of members. They are also a vital element of risk adjustment (RAF) scoring, determining the amount of payment a Medicare Advantage plan will receive for specific health care services. However, it’s not always obvious which HCC code to use. In addition, in some cases, physicians may need support to make a diagnosis, making HCC codes a necessary part of a physician’s decision-making process.

Meaning of risk score

CMS’s recent changes to the HCC scoring system have made it even more challenging to determine which patients are at the most significant risk of developing cancer. The risk score calculation is based on the severity of the condition and the patient’s overall health. CMS will only use the HCC with the highest risk score if a patient has multiple conditions. Many patients will likely receive several diagnoses in one calendar year, resulting in a high-risk score.

The risk score is calculated by taking into account all of the different risk factors correlated with cancer development. In 2015, the final study population included 1,098,252 members from 58 separate contracts with 24 MA organizations. Members of prescription drug plans are included in this number. The risk adjustment factor reflects the induced demand component driven by cost-sharing decreases. It is also reliant on the social and economic situations of the participants.

Importance of proper documentation for HCC coding

It’s essential for HCC coding in healthcare providers to document the entire patient encounter, including all medical notes. The meeting must occur during which the patient is evaluated, treated, and monitored. Most risk-adjusted HCCs are documented during outpatient office visits, whereas only a tiny percentage are recorded during inpatient encounters. If physicians can’t document the entire meeting, they miss out on valuable time and money.

To ensure that you don’t miss important details, you should document the patient’s BMI. However, it’s not always possible to assign an HCC code to a patient without documentation of morbid obesity. For example, documentation of a BMI of 40.5 does not result in an HCC code. So instead, you should document HCC 22 for morbid obesity, which carries a relative risk factor of 0.369 and an additional predicted cost of $3457.