HCC Coding Guidelines and Their Impact on Medical Practice Revenue

Posted by Nancy Clements on Jan 4, 2021 12:31:13 PM

Is your practice accurately reporting the severity of illness for Medicare patients? If chronic conditions are not documented and coded annually, the health status of your patients is not accurately reflected in their care. 

Medicare beneficiaries must choose between traditional and managed Medicare on initial enrollment. Managed Medicare companies are given a fixed dollar amount per enrollee from CMS based on that individual’s Risk Adjustment Factor (RAF). This is a score that identifies patient health status.

This standardized measurement includes almost 80 Hierarchical Coding Conditions (HCC) categories of medical conditions that map to a corresponding group of ICD-10 codes used to calculate reimbursement from CMS. HCC codes are payment multipliers that impact physician reimbursement through the RAF score which affects every physician's reimbursement no matter what CPT code is billed. Payments received are based upon the HCC diagnoses assigned to each enrollee, plus a demographic factor.

In these payment models, diagnosis coding can impact incentive payments and negative payment adjustments along with utilization, quality measures and patient satisfaction. Accurately reporting the severity of illness for patients has never been more important!

“Fighting for proper reimbursement includes a keen understanding the concepts of risk-adjusted diagnosis coding and how it applies to level of specificity and your reimbursement.” - Libby Purser, CHI, CMC, CMIS, CMOM, CPC, CRC, HIM Supervisor

There are strategies and processes that your practice can implement. First, make sure ICD-10 codes are supported in the medical documentation. Official coding guidelines must be followed.

“Physicians should document and code conditions that co-exist at the time of the encounter, and require or affect patient care, treatment or management,” she said. “History codes may be used if they impact the current care.”

Documentation must show or support the diagnosis and plan of care for each diagnosis to the highest degree of specificity and follow coding guidelines in each chapter. Medicare Advantage insurance companies perform audits to ensure accurate reporting of members’ conditions, including diagnosis codes and secondary diagnoses, to the highest level of specificity.

With new payment models, diagnosis coding can impact incentive payments and negative payment adjustments along with utilization, quality measures and patient satisfaction.



Learn the guidelines and go through examples of HCC Coding in this online course. 

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