Health Information Management

Tip: Understanding HCCs

APCs Insider, January 24, 2014

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The Hierarchical Condition Category (HCC)model used for Medicare Advantage (MA) patients categorizes ICD-9-CM diagnosis codes into disease groups that are similar both clinically and financially.
A hierarchy is created so that patients are coded for the most severe manifestation among related diseases.
For unrelated diseases, HCCs accumulate. For example, coders report at least three separate HCCs for a male patient with heart disease, stroke, and cancer, and his predicted cost of treatment will reflect increments for all three problems.
HCCs are assigned using hospital and physician diagnoses from any of the following five sources, according to CMS:
  • Hospital inpatient, principal diagnoses
  • Hospital inpatient, secondary diagnoses
  • Hospital outpatient
  • Physicians
  • Clinically trained nonphysicians (e.g., psychologists, podiatrists)
The model does not distinguish among sources; in particular, it places no premium on diagnoses from inpatient care, according to CMS. 
 
This tip is adapted from “Accounting for HCCs” in the January issue of Briefings on APCs.



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