November 01, 2017
The triple aim: better care, healthier people and communities, and smarter spending; these are the heart of value-based reimbursement models. Whether you are looking to participate in an Accountable Care Organization, operationalizing the Quality Payment Program, or applying for Comprehensive Primary Care Plus, a common theme across all the Medicare value-based programs is their focus on improving care and quality of life while reducing cost and expense.
What is HCC?
Hierarchical Condition Categories (HCC) are a scoring methodology used through multiple value-based programs to communicate to the Centers for Medicare and Medicaid Services (CMS) the cost and resource utilization required to care for your patient population. This means that accurate HCC scores for your patient population allows CMS to understand the complexity of care your patients require. Inversely, if you are not accurately representing your patients’ complex health needs through HCC scores, it will appear to CMS and the value-based program that you are not providing cost-effective care because your costs will be higher than expected based on your patients’ expected cost utilization.
HCC is a risk-adjusted score based on patient demographics such as age and reason for enrollment into Medicare but the main component of the score that requires action from your organization is the diagnosis codes that you submit to CMS on your Medicare claims. CMS uses the diagnosis codes to determine the expected cost utilization of the patient to care for their acute and chronic illnesses.
It is important to understand that CMS does not carry over diagnosis information from year-to-year for patients. This means that CMS wipes the slate clean for every patient on the first of January and their HCC score will no longer represent that they have chronic or acute illnesses. For example, if a patient is diagnosed with Diabetes Mellitus on December 30, 2016, on January 1, 2017, CMS will not carry over that Diabetes Mellitus diagnosis for the 2017 HCC scores until you submit that diagnosis on a 2017 claim.
Key considerations for implementation plans
To support accurate HCC scoring, there are key considerations to keep at the forefront of your implementation plans. Engaging your clinicians in understanding the documentation requirements, not only to support coding for the reason for visit but also any contributing diagnoses for the patients care, will be instrumental in setting the foundation for accurate representation of your patient’s health care needs. In addition, educating your coding team regarding the important role they play in this process supports their engagement and understanding.
One of the most common errors that occurs with HCC scoring is not coding to the highest specificity or omitting diagnosis codes all together due to a lack of understanding of the additional focus and impact of their work. Implementation of consistent workflows and a robust Quality Assurance program will provide support for communication between your clinical and coding departments.
With accelerated movement to value-based reimbursement across the market, the ability to accurately report patients’ complex needs to account for their resource and cost utilization is becoming increasingly important. Multiple Medicare programs use HCC coding as a means of communicating a patient’s diagnosis history, current health status, and projected resource utilization. A lack of understanding of how HCC scores are used to assess cost effective care provided by your organization, leaves you at risk of causing an unintentional negative impact to your organization’s financial health.