Why is HCC coding important?

Hierarchical Condition Category Coding Helps Communicate Patient Complexity

Also HCC Coding paints a picture of the whole patient. In addition to helping predict health care resource utilization, RAF scores are used to risk adjust quality and cost metrics. By accounting for difference in patient complexity, quality and cost performance can be more appropriately measured.

Hierarchical condition category (HCC) coding is a risk-adjustment model originally designed to estimate future health care costs for patients. The Centers for Medicare & Medicaid Services (CMS) HCC model was initiated in 2004, but is becoming increasingly prevalent as the environment shifts to value-based payment models.

Hierarchical condition category relies on ICD-10 coding to assign risk scores to patients. Each HCC is mapped to an ICD-10 code. Along with demographic factors (such as age and gender), insurance companies use HCC coding to assign patients a risk adjustment factor (RAF) score. Using algorithms, insurances can use a patient’s RAF score to predict costs. For example, a patient with few serious health conditions could be expected to have average medical costs for a given time. However, a patient with multiple chronic conditions would be expected to have higher health care utilization and costs.

Diseases and conditions are organized into body systems or similar disease processes. The top HCC categories include:

  • Major depressive and bipolar disorders
  • Asthma and pulmonary disease
  • Diabetes
  • Specified heart arrhythmias
  • Congestive Heart Failure
  • Breast and prostate cancer
  • Rheumatoid arthritis
  • Colorectal, breast, kidney

Patients are often assigned to more than one category because the combination of demographic information and risk factors can cumulate to represent more than one kind of illness or potential for illness. The risk adjustment identifies patients in need of disease management and establishes the financial allotment provided by CMS towards the annual care of each patient.

Physicians can accomplish the documentation standard by understanding MEAT. The provider must document all active chronic conditions as well as conditions that are relevant to the patient's current care. MEAT is an acronym used in HCC to ensure that the most accurate and complete information is being documented:

  • Monitor-signs and symptoms, disease process.
  • Evaluate-test results, meds, patient response to treatment.
  • Assess/Address-ordering tests, patient education, review records, counseling patient and family members.
  • Treat-meds, therapies, procedures, modality.

It falls to your coders to ensure that each patient medical record is coded accurately, and all factors, such as supporting documentation about the status of each condition, are fully represented. Diagnosis can’t be inferred test results, but it can be assigned to each condition documented on the record. Further, the documentation must show that the condition is monitored, evaluated, or treated. Each diagnosis should also have an assessment and plan. The treatment and level of care must be justified and the patient health status considered. All chronic conditions must be monitored and reported at least once each year.