This article focuses on the ICD 9 codes and their hierarchical structure. It also discusses the risk-adjustment model used by CMS and the impact of these codes on physician payment. Ultimately, this article aims to help you become more comfortable coding for complex medical conditions.

Hierarchical condition category coding

Hierarchical condition category coding is a powerful tool that can be used to measure healthcare costs. It allows healthcare professionals to paint a comprehensive picture of a patient’s health and can help predict how much a particular treatment will cost. It also helps adjust cost and quality metrics to account for patient complexity.

The HCC model was first implemented by CMS in 2004 and is based on risk adjustment models. The model is used by Medicare Advantage plans, Medicare Shared Savings Programs, Medicaid, and private health plans to estimate healthcare costs. The HCC model consists of categories of chronic medical conditions with similar cost patterns. One example of an HCC is diabetes.

The American Academy of Family Physicians recommends using this method for coding. The goal is to accurately depict the patient’s complexity and provide a clear picture of their overall health. By using HCC, healthcare providers can measure their effectiveness and improve quality and efficiency. It is beneficial for risk adjustment, a mechanism used by various government agencies and payers to determine how much healthcare costs them.

ICD 9 Codes

Hierarchical condition category coding helps providers to describe the complexity of patient care. It helps to paint a comprehensive picture of the patient’s condition, which improves the prediction of healthcare resource use and cost. It also helps providers to track demographic data that may affect cost and performance metrics.

For example, consider the first column of the data frame, visit_name, which typically is a patient identifier or an ICD-9 code. The column may be empty, indicating that the field needs to be filled in. The data frame can be quite large and contain many matching fields. Hence, each match must be a one-to-one match to ensure accuracy.

The ICD-10 codes are grouped into condition categories and diagnosis groups. For example, the first category contains two types of codes: the chronic and the acute categories. The second category includes diseases and conditions that are costly or incurable. The two categories have different risk adjustment factors, so practices must choose wisely. In addition, it is essential to know which unspecified codes don’t carry risk adjustment.

CMS Risk-Adjustment Model

The CMS risk-adjustment model uses a list of Hierarchical Condition Categories (HCCs) to calculate payments to physicians and hospitals based on patient risk factors. The list is updated annually and is published in spreadsheet format. Each risk-adjustment payment model uses a variation of the HCC list.

HCCs group clinically related diagnoses. They are a valuable tool in the risk-adjustment processing system, although not all diagnoses are assigned to a particular category. Some diagnoses are more predictive than others, mainly acute and chronic conditions.

The CMS risk-adjustment model uses HCCs to assess healthcare costs in the coming year. It uses data from Medicare records to assign an HCC number. This information is based on the medical records submitted for reimbursement when the condition was diagnosed.

Impact on Physician Payment

The impact of Hierarchical Condition Categories (HCCs) on physician payment will likely increase in the coming years. These new Medicare programs are designed to adjust Medicare capitation payments based on risk. They document the highest disease categories for a patient and are captured over the year. By selecting ICD-10 codes that align with the HCCs, physicians can accurately document the health status of their patients and see a positive impact on physician payment from all payers.

As a result, physician payment is more closely tied to patient outcomes and a patient’s risk score. In a value-based payment system, the proper documentation of hierarchical condition categories is vital. Inaccurate reporting of these categories can have a detrimental impact on physician payment. Physicians must be aware of how they can improve documentation and minimize this negative impact.

Importance in Accountable Care Organizations

ACOs participating in the Medicare Shared Savings Program (MSSP) can share in the savings generated from Medicare payments if they treat beneficiaries in high-risk categories. However, because the MSSP is not designed to capture the growth of risk scores over time, the ACOs’ incentives to care for high-risk patients must be appropriately balanced. For this reason, ACOs may choose to drop high-risk beneficiaries to improve their chances of meeting their share of the shared savings.

Hierarchical condition category (HCC) coding provides an accurate picture of patient health and disease complexity and is vital for a sustainable ACO. It also helps to account for the social determinants of health, which may influence cost and quality outcomes. HCCs also help providers calculate the risk-adjusted cost and quality metrics.