This document discusses hierarchical condition categories (HCCs) which CMS uses to risk adjust Medicare Advantage plan payments based on beneficiaries' demographics and medical conditions. It provides steps providers can take to accurately capture beneficiaries' HCCs through documentation and coding practices to ensure proper risk adjustment and reimbursement. This includes monitoring conditions, testing results, treatments, addressing all chronic illnesses annually, and coding to the highest level of specificity. ICD-10 examples for capturing certain HCCs like vascular disease, ostomies, and morbid obesity are also outlined.

1. Hierarchical Condition Category
By
Cheryl A Macias, MHA/Inf, CPC
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2. Hierarchical Condition Category
Did you know?
• That currently, CMS uses the CMS–hierarchical condition category
(CMS– HCC) model to risk adjust MA payments. This model uses
beneficiaries’ demographic characteristics and medical conditions
collected into hierarchical condition categories (HCCs) to predict their
costliness
• Physician groups, along with the MA plans with which they work, stand
to collectively lose significant dollars in revenue if they don't quickly
learn how to adapt to the new environment.
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3. Purpose of Risk Adjustment
• Risk Adjustments allows CMS to:
– Pay plans for the risk of beneficiaries enrolled
– Replaces “average” amount for Medicare beneficiaries
– CMS increases the accuracy of payments (health status & demographics)
Medicare Managed Care Manual Chapter 7 Risk Adjustment (Rev. 118,09-14-14)
• Statutory & Regulations Authority
– Medicare Advantage Plan –Part A & B Title XVIII of Social Security Act
• Subpart G 42 CFR § 422.304
cms.gov
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4. CMS Requirements
• Yearly Audit for Risk Assessment Conditions
– Increase in number of Chart pulled for Audits
– Review encounters spanning One Year
– Reimbursement is based on supporting documentation within the
Medical Record
– Not because patient/member has a Chronic Condition
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5. Steps to Capture HCCs
Add some M.E.A.T. in your charting
• Monitoring-signs, symptoms, disease progression, disease regression
• Evaluating-test results, medication effectiveness, response to
treatment
• Assessing/Addressing-ordering tests, discussion, review records,
counseling
• Treating-medications, therapies, other modalities
• Stating [“history of” means the patient no longer has that conditions]
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6. Steps to Capture to HCCs
Accurate documentation & coding
• Offers the practice the ability to gain correct-Risk Adjustment
Dollars
• Captured by the Providers documentation
– Address all chronic conditions at least annually
• Code all illness addressed during Face-to-Face visit
• Code to the highest level of specificity
• Patients with Ostomy or Amputation
– Ensure your provider addresses the status during the office visit
• This allows the Diagnosis to be coded
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7. Steps to Capture HCCs
• ICD-10 CM- Updated Annually (October)
• Increases correct coding
• In-house Chart Reviews –
–Creates an opportunity for:
• In-service training
• One-on-one training
• Guide Tools
• Appeals -Coder review
• Additional diagnostic codes
• Positive impact on HCC score
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8. Steps to Capture HCCs
• Electronic Claim Submission
– Initiate discussion with your Electronic Data Interchange Vendor
• Receive reports on rejected items
– Validate maximum number of diagnosis transmitted
• To receive accurate Reimbursement
– Validate your claim systems storage capability (diagnosis codes)
» To capture and send all
– ANSI837- claim format –supports your HIPAA Compliance
• Question is this process capturing all relevant clinical information
» Providers/EDI Vendors most times map to legacy transaction
• “the original nine Dx codes” and could possibly omitting ten and beyond-
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9. Steps to Capture HCCs
• Research New Products
– Track diagnosis data for “terminated patients”
– Revenue can be recaptured
• From members who initially were on your monthly eligibility report , but may
no longer appear since eligibility has ended. (lost revenue-worth while focus)
• Audit- for unprocessed data (backlog)
• New Patient’s
– Could have assigned HCCs from prior Health Plan
• Incorporate plan on to maintain (as appropriate) moving forward as this will
increase continuity of care and comprehensive data collection
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10. ICD-10 Examples for HCCs
• Vascular Disease (HCC-108)
– Manifestations of PVD including: ulcers, gangrene, claudication,
cellulitis, & amputation status
• Artificial Openings for Feeding/Elimination (HCC-188)
– Surgically created “ostomy”
– Assign only complication code-attention to: adjustments or
repositioning of catheter, closure, reforming, &/or
removal/replacement of catheter
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11. ICD-10 Examples for HCCs
• Morbid Obesity (HCC-22)
– Is becoming a growing public concern
• Overweight, obese, morbid obesity- must be obtained from provider’s
documentation and must include BMI, which can be coded from dietitian
referral &/or counseling.
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12. Questions
cherylmacias@hotmail.com
910-617-6495
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