Health Information Management

Providers need to understand HCCs as Medicare Advantage continues to grow

APCs Insider, October 3, 2014

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By Steven Andrews, Editor
The number of patients enrolled in Medicare Advantage (MA), or Part C, plans has continued to grow, reaching new high for the fifth year in a row, according to a recent release from CMS.
But providers will have to be vigilant in identifying these patients to meet the unique coding and documentation requirements for MA plans.
MA plans use Hierarchical Condition Categories (HCCs) in order to determine payment rates for diagnoses. The HCC model used for MA patients categorizes ICD-9-CM diagnosis codes into disease groups that are similar both clinically and financially. CMS creates a hierarchy so that patients' conditions are coded for the most severe manifestation among related diseases.
For example, there are more than a dozen diagnoses that will lead to a heart failure HCC, but payment will only be made for one. There's a trumping logic for related diseases, so that if the patient has metastatic cancer, the provider wouldn't also get payment for the patient's colon cancer. However many HCCs you have, payment is made for the highest of them.
For unrelated diseases, HCCs accumulate, so patients can have more than one HCC attributed to them.  For example, the physician documents that a male patient suffers from heart disease, stroke, and cancer. Each of those diagnoses maps to a separate HCC. CMS will factor all three HCCs in when making a payment to the MA plan.
Each HCC is assigned a risk-adjusted factor (RAF), which is a relative weight, similar to the inpatient DRG system. Some diagnoses reported together—such as congestive heart failure, and diabetes—will generate a higher RAF value, resulting in higher payments. Not all diagnoses map to an HCC, however, so they will not generate a higher value.
Starting January 1, each patient's history is effectively reset, requiring physicians to document any history of or ongoing diagnoses each year. If the physician doesn’t document all of the diagnoses, the higher RAF values can't be generated.
To learn more, listen to HCPro's webcast "HCC Documentation and Coding Tips for Physician Practices and Outpatient Departments" Tuesday, October 28. Speakers Bonnie S. Cassidy, MPA, RHIA, FAHIMA, FHIMSS, AHIMA-approved ICD-10-CM/PCS trainer and Elaine King, MHS, RHIA, CHP, CHDA, CDIP, FAHIMA, AHIMA-approved ICD-10 CM/PCS trainer, will explain HCCs and RAF, then provide guidance on how to analyze and mitigate potential challenges in HCC identification.


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