January 25, 2021

Will Your Diagnosis Coding Help or Hurt Your Organization Next Year?

Although many think of HCC coding as a ‘behind-the-scenes’ activity, awareness of risk factor scoring during evaluations can ensure fair future reimbursement.

The Hierarchical Condition Category (HCC) risk adjustment model is used to set capitation rates for Medicare Advantage patients. HCC scoring, which is derived from ICD-10 codes, aims to make sure organizations are appropriately compensated for patients with chronic conditions. After all HCC scores are added together for a particular patient, the risk adjustment factor (RAF) is assigned. Higher RAFs communicate more complex patients that require advanced care and decision-making, ultimately resulting in higher reimbursement. In order to be fairly compensated in the next year, it is essential providers document all active diagnoses at every visit. 

CMS-HCC Structure

HCC scores are assigned by using a cross-walk to ICD-10 coding and then a filtration into diagnostic groups, then condition categories, and finally HCCs. Not all diagnoses will ultimately have an HCC score. 

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In addition to active diagnoses, other factors are given weight in scoring – such as age, place of service, and if the patient is a Medicaid recipient. 

Samples of 2020 HCC values from CMS


It is always important to record all current and past medical history in the patient record. However, providers may want to keep in mind the true definition of past medical history. If a patient is being treated or monitored for a condition that must be considered when creating a treatment plan, the condition is active and should be listed as a diagnosis rather than 'history of' in the patient record. ‘History of’ diagnoses are not eligible for HCC scoring. For example, diabetes with acute complications carries a weight of .305. If the patient also had morbid obesity at the time of the visit, and it was listed as a diagnosis rather than a 'history of,' an extra .244 would be added to the RAF, resulting in increased reimbursement. 

Code specificity also plays a role in HCC scoring. AHIMA advises coding to the highest specificity to ensure accurate RAF calculations. For example, major depressive disorder unspecified does not qualify for an HCC score, while major depressive disorder specified as mild is eligible for an HCC score. 

How to achieve accurate HCC scoring

As always, detailed documentation is the best way to ensure accurate coding and ultimately correct RAF calculations. The right technology can be a valuable tool to confirm that all active diagnoses are recorded during an encounter. 

For example, GlaceEMR displays current HCC scoring at the top of every chart. The current risk score is displayed with the potential score gap based on the previous year’s claims – letting providers know if the RAF is trending higher or lower for the current year. An interactive screen identifies which codes are potentially overlooked and prompts the addition of missing diagnosis codes to the claim, if applicable. Risk stratification templates also prompt providers for additional information that aids with capturing the data necessary for coding. The optimized HCC scoring tool is integrated into daily workflows, and practice-wide analytics track performance year-on-year, improving revenue. 


Another reason to pay attention to HCC scores

A fact sometimes overlooked about HCC scoring is that it is used by the Department of Health and Human Services (HHS) to determine ACA Plan premiums. The HHS model covers patients of all ages and predicts both medical and drug spending. Some speculate that commercial payers may one day use HCC scoring to determine potential costs and reimbursement for all their plans, giving providers another reason to pay attention to accurate coding and HCC scoring. 

Interested in how Glenwood Systems can help your practice reach its revenue goals in 2021, or how to ensure accurate coding? Visit us at glenwoodsystems.com or call 888-452-2363.

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