HCC Coding and Risk Adjustment Model

Risk adjustment and HCC coding (Hierarchal Condition Category) model was mandated by the CMS in 1997. Today, the payment model plays a crucial role in insurance benefits and reimbursement scenario. Under this model, a risk factor score is assigned to individuals who have been diagnosed with a chronic or serious illness based on demographics or health conditions. High reimbursement can be obtained only when HCC coding is accurate and there is proper documentation to capture the complexity of patient’s condition.

Risk Adjustment Model

HCC coding success is hugely dependent on how accurately and timely data is captured. It also depends on the proper tracking of a patient’s care and condition over a certain period of time.

How it works?

Health conditions of a patient are determined by ICD-10 diagnose that is submitted on claims by the physician. Based on the complexity of the patient’s condition, HCC codes allow payments to be risk-adjusted. Future financial utilization and risk is predicted by the risk adjustment model using a patient’s documented 12- month diagnostic coding history.

As per the risk adjustment model, demographics and diagnoses of a patient are used for determining a risk score. This is a relative measure of how costly that patient is being anticipated to be. For instance, a healthy patient will have a below-average Risk Adjustment Factor (RAF) score which means, revenue from the insurance premium is transferred from health patients to patients who have an above-average RAF score.

If chart documentation is incomplete or inadequate or if there is inaccurate diagnosis coding, then it will lead to lower risk score. Proper coding increases risk adjustment factor (RAF) scores and also helps improve the revenue flow of the practice.

When it comes to the risk adjustment model, payment rate of two patients in the same practice can differ. There are several factors on which this is based, determining the amount of work/risk involved in maintaining the patient’s health.

It is very important to ensure proper HCC capture and proper claims submission with codes that capture all manifestations of a chronic disease that a patient has. Since ICD-10 has increased code specificity along with requirements for detailed documentation, proper HCC capture has become vital.

Many practices are choosing to outsource HCC coding needs to a third party because it is helping them get timely revenue. They are also able to focus on quality care provision rather than worry about coding. 

About 247 Medical Billing Services:
We are a medical billing company that offers ‘24/7 Medical Billing Services’ and support physicians, hospitals, medical institutions and group practices with our end to end medical billing solutions. We help you earn more revenue with our quick and affordable services. Our customized Revenue Cycle Management (RCM) solutions allow physicians to attract additional revenue and reduce administrative burden or losses.

Contact: 
247 Medical Billing Services
Tel: +1 888-502-0537
Email: info@247medicalbillingservices.com

Importance of Documentation in HCC Coding

CMS uses the HCC (Hierarchal Condition Category) risk adjustment model for estimating the predicted costs for Medicare beneficiaries. The results have a direct impact on the revenue received by healthcare organizations for patients who are enrolled in Medicare Advantage Plan. In order to be successful in risk-based contracts, it is necessary for healthcare organizations to ensure accuracy in clinical documentation. The documentation must reflect clinical needs and diagnoses of patients and must have the necessary specificity for patient assignment to correct RAF score. Accuracy in documentation plays a huge role in helping the provider receive appropriate and timely reimbursement.

HCCs determine reimbursement on the basis of patients’ diagnosis. The main source of data is the hospital and physician claims and these drive the risk adjustment model. For best risk adjustment, it is very important to ensure specificity and accuracy in medical documentation and even subsequent ICD-10 coding.

If there is failure to properly assign risk to patients, it will impact reimbursement, potentially resulting in unfair compensation for the healthcare provided to the patient. Providers also face reduced payment in a performance-based payment model if medical documentation lacks accuracy needed for assigning the accurate diagnosis codes.

Coding guidelines prohibit the assumption of cause and effect relationships to a large extent. If the relationship isn’t well documented, it will become impossible to report it. At times, providers end up overlooking the chronic conditions. They don’t document chronic and/or permanent diagnoses as often as they are assessed or treated. CMS needs these diagnoses to be submitted at least on an annual basis for risk adjustment.

It is very important for providers to educate, monitor ad evaluate the quality of outpatient documentation and coding in their practice in order to mitigate risks.

To support an HCC, it is very important to have accurate clinical documentation in the patient’s heath record that will support the presence of the condition. It should also indicate the qualified provider’s assessment or plan for management of the condition.

There are several strategies that are used by organizations for reviewing clinical documentation. For instance, some organizations use the MEAT approach that stands for monitoring, evaluation, assessment and treatment.

Many healthcare organizations choose to outsource HCC coding services to a third party. Considering the complexities, it is helpful to let a third party handle this task because it helps in obtaining timely reimbursement.

About 247 Medical Billing Services:

We are a medical billing company that offers ‘24/7 Medical Billing Services’ and support physicians, hospitals, medical institutions and group practices with our end to end medical billing solutions. We help you earn more revenue with our quick and affordable services. Our customized Revenue Cycle Management (RCM) solutions allow physicians to attract additional revenue and reduce administrative burden or losses.

Contact: 
247 Medical Billing Services
Tel: +1 888-502-0537
Email: info@247medicalbillingservices.com

Benefits of Outsourcing HCC Coding

Compensation of any healthcare organization relies heavily on the accuracy and efficiency of medical coding. If the billing department isn’t well-trained to handle the complexities of coding, it might lead to significant revenue loss. Same is the case with HCC coding (Hierarchal Condition Category) in which each HCC is mapped to a certain ICD-10 code.

Many healthcare organizations choose to outsource HCC coding because it helps them get rid of revenue worries and focus on the core practice.

Here are some of the benefits that they get to enjoy with outsourcing:

·        It gives them access to an expert, fully-trained coding team that knows how to handle HCC complexities. Reputed billing companies work with coders who are updated with latest coding requirements, including new ICD-10 codes.

·        Outsourcing HCC coding needs to a reliable company helps ensure coding accuracy and speed. Such companies have the right software that makes it easy for the medical organization staff to communicate with coding professionals. Documentation and patient charts can be uploaded to this software and shared instantly. The staff can also review the finished coding on a chart basis for QA purposes. All this helps in ensuring accuracy in HCC coding. 

·        Having an in-house team of coders gives limited coding capacity. It also gets challenging to quickly adjust to changing coding volumes. But with outsourcing, these challenges are eliminated because the company is well-equipped to match coding demands perfectly.

·        Another benefit is that they get to save a huge amount because there is no need to maintain an in-house team. Infrastructure costs are also eliminated. Reduced overhead costs help healthcare organizations become more efficient.

·        As mentioned earlier, if a dedicated team will be handling the coding complexities and bringing in revenue, then healthcare providers will be able to focus on quality care. There will be fewer distractions from core business activities.

·        It is a common myth that HCC codes are not the same as CPT codes and therefore they don’t affect revenue. This isn’t true. Since HCC coding is a very important activity needed for receiving maximum Medicare Advantage reimbursements, it cannot be overlooked. It makes sense to let a dedicated third party handle this job.

Only an experienced coding service provider can work with clinical documentation specialists and physicians for ensuring compliance with complex revenue models. They can help in mitigating compliance risks as well.

About 247 Medical Billing Services:

We are a medical billing company that offers ‘24/7 Medical Billing Services’ and support physicians, hospitals, medical institutions and group practices with our end to end medical billing solutions. We help you earn more revenue with our quick and affordable services. Our customized Revenue Cycle Management (RCM) solutions allow physicians to attract additional revenue and reduce administrative burden or losses.

Contact:
247 Medical Billing Services
Tel: +1 888-502-0537
Email: info@247medicalbillingservices.com