An Introduction to HCC Coding: Why It Matters
What is HCC coding and overview?
Hierarchical Condition Category (HCC) coding is a risk-adjustment model originally designed to estimate future health care costs for patients. HCC coding relies on ICD-10-CM coding to assign risk scores to patients. Each HCC is mapped to an ICD-10-CM code. Along with demographic factors such as age and gender, insurance companies use HCC coding to assign patients a risk adjustment factor (RAF) score.
HCC is a term that describes the grouping of similar diagnoses into one related category (an HCC) to be used in a risk adjustment payment model. Risk adjustment payment models are regulated by the federal government to reimburse participating health insurance plans for the medical care of enrolees.
Types of HCC Categories
The Centers for Medicare & Medicaid Services (CMS)- Two most commonly used categories:
CMS-HCC– It is a CMS-based HCC model used for risk adjustment in the Medicare Advantage program.
- It is intended for patients over the age of 65 and those who are disabled.
- CMS-HCC is essentially a prospective model that uses a patient’s diagnosis from the previous year to forecast their healthcare costs for the following year.
- Regular Medicare processes are used to collect the patients’ data.
- The risk adjustment for these patients considers factors such as their demographics, health conditions, and institutional status.
- HHS-HCC- It is an HHS-based HCC model used for risk adjustment of commercial payer populations.
- It is designed for patients of all ages.
- HHS-HCC is essentially a concurrent model that requires patients’ current benefit year diagnoses to determine their medical and drug expenditures for the same year.
- Risk factors for these patients include their demographics, health conditions, and financial situation.
Importance of Accurate HCC Coding
- Financial Sustainability: Accurate HCC coding helps ensure that healthcare plans can cover the costs of care for patients with higher needs.
- Quality of Care: By focusing on the complexity of patient conditions, HCC coding can enhance care coordination and management strategies.
- Regulatory Compliance: Proper coding is essential for compliance with federal regulations and standards in healthcare reimbursement.
Types of HCC review processes:
Prospective Review: assists providers in preparing for scheduled/upcoming patient encounters.
- Goal – to review and share all possible conditions with the providers so that they can have them addressed with the patient on the scheduled visit.
Concurrent Review: is a real-time review of inpatient/hospital claims, HCC coders assess the patient chart, clinical notes, and HCC codes before submitting claims to payors.
- Goal – to code to the highest specificity and reduction in the medical necessity denials.
Retrospective Review: is usually performed several weeks or months after the patient encounter and claims submission process has been completed.
- Goal – to conduct a post-audit and potentially uncover unreported and incorrectly reported HCC codes.
Conclusion:
By leveraging efficient coding practices and understanding the nuances of various HCC categories, healthcare providers can significantly enhance their revenue cycle and care management. CodeEMR offers expert HCC coding solutions, designed to help your practice stay compliant and maximize revenue, while reducing the administrative burden.
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