Health Information Management

Transformational HIM strategies: The role of HIM in risk adjustment and HCC coding

HIM-HIPAA Insider, December 22, 2014

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More than ever before, HIM is being recognized as an enterprise profession important to ambulatory, acute, and postacute settings. A good example of the transformation is HIM's involvement in CMS' risk adjustment and Hierarchical Condition Category (HCC) coding system.


CMS mandated HCCs as a payment model in 1997 and implemented it in 2003. HCCs identify patients with severe or chronic illness. It has been the reimbursement basis for Medicare Advantage plans since 2004 and is used to predict the cost of care for individuals enrolled in the plan for the following year.
With increased focus on containing healthcare costs, HCC coding has continued to gain ground as the payment model under the Affordable Care Act. It is the risk adjustment model mandated by CMS for accountable care organizations (ACO).
The HCC structure identifies a risk factor score for the patient based on a blend of his or her health conditions and demographic details. CMS' HCC model dictates that risk adjustments must meet the following standards:
  • Be prospective in nature
  • Be derived from diagnostic sources (i.e., inpatient and outpatient hospital and physician data)
  • Base payment for each patient based on HCCs and influenced by Medicare costs for chronic diseases
  • Apply additional factors when hierarchy of more severe and less severe conditions coexist
  • Make a final adjustment due to age, sex, original Medicare entitlement, disability, and Medicaid status
Continue reading "Transformational HIM strategies: The role of HIM in risk adjustment and HCC coding" by Adriana van der Graaf, MBA, RHIA, CHP, CCS, associate director for Navigant Consulting, Inc., in Washington, D.C., on the HCPro website. Subscribers to Medical Records Briefing have free access to this article in the December issue.



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