Hierarchical condition category (HCC) coding is a complex risk-adjustment model that requires provider time, effort, and education. Regardless of how proficient providers seem to be with their documentation, the chances that you are missing revenue opportunities (aka losing potential reimbursement) in HCC coding are higher than you think.
In value-based care, HCC coding has a direct impact on your organization’s financial health. HCC affects a patient’s risk adjustment factor (RAF) score, which means if your provider’s documentation is not coded accurately and specifically according to ICD-10 guidelines, reimbursement rates are being jeopardized.
Here are four commonly missed opportunities in HCC coding that could be costing you:
1. Failure to report chronic conditions.
Patient risk scores are reset each year. In other words, on January 1, every patient has a clean slate. That means, previously diagnosed chronic conditions are not automatically carried over for risk adjustment.
If a patient was diagnosed for heart disease last year, and you fail to document detailed HCCs for that diagnosis again this year, the patient may be given an inaccurate RAF score, potentially resulting in unfair compensation for the cost of the continued care and treatment of that chronic condition.
To avoid this missed opportunity, providers should complete a risk assessment each year and use detailed HCC coding to report chronic conditions at a patient’s annual visit.
2. Lack of specificity and incomplete coding.
In value-based care, specificity is key in the calculation of RAF scores and reimbursement rates. Oftentimes, a provider will document a patient’s condition and use a non-specific ICD-10 code. This non-specific code will not affect a patient’s risk score and fails to give a complete picture of the patient’s health.
Instead, providers’ coding should be more specific and complete. Documentation must not only capture HCC codes that are associated with the reason of a patient’s visit, but also include any diagnosis codes for chronic conditions that affected the evaluation and treatment of the patient. This way, the patient’s RAF score and predicted cost of care will be more in line with the patient’s health status.
In short: Specific and complete diagnosis coding translates into higher RAF values and more accurate reimbursement rates.
3. Inadequate coding knowledge.
The HCC risk adjustment model is not a simple concept. Plus, it’s continuously being reevaluated to improve accuracy. HCC coding knowledge can become quickly outdated as diagnosis codes are added or deleted each year, and with the shortage of trained HCC coders, many healthcare organizations and providers struggle to stay current.
Additionally, value-based providers are still working to get through the steep learning curve that came with switching to a payment structure that is based on diagnosis coding (ICD-10) instead of procedural codes (CPT). Learning which code to use in the right situations takes time, effort, and education.
4. Patients Not Seen This Year.
Finally, one of the biggest missed opportunities, but perhaps the easiest to resolve is unseen patients — especially those patients who had high RAF scores last year and have not had a face-to-face visit with their provider in the current year. Without that annual visit, you are unable to comprehensively update HCCs and, therefore, the RAF score and reimbursement rates will be impacted negatively.
To avoid this missed opportunity, put a strategy in place for flagging patients who have yet to be seen by the provider and who would benefit the most from direct outreach, preventive care, and chronic care services.
Missed opportunities in HCC coding could have a significant financial impact. For example, a RAF score for a 76-year-old patient that is calculated simply on age, gender and Medicare eligibility might result in an estimated annual cost of care to be around $5,500.
However, if a provider uses specific HCCs to fully document the same patient’s health status and conditions — including her vascular disease — her RAF score value changes and the cost of care is more accurately predicted to be $16,500. That’s a difference of $11,000. For a hospital with 30,000 patients, that kind of adjustment could potentially add up to an additional $330 million in reimbursements each year.
Avoiding missed opportunities and subsequent lost revenue requires better data quality and provider documentation. By investing in solutions that analyze provider coding behaviors and identify missed opportunities in HCC coding and risk adjustment, your organization can make the improvements needed to realize full reimbursement potential.
REVEAL/md RAF HCC is a cloud-based subscription service for value-based care organizations. ACOs can use the predictive analytics software to maximize value-based care reimbursement potential through more accurate HCC coding and risk adjustment factor scores.