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Hierarchical Condition Category (HCC) Coding

Published on Friday, September 15, 2017

What is HCC coding?

  • Risk adjustment and HCC coding is a payment model mandated by the Centers for Medicare and Medicaid Services (CMS) in 1997. Implemented in 2003, this model serves to identify individuals with serious or chronic illness and assigns a risk factor score to the person based upon a combination of the individual’s health conditions and demographic details. The individual’s health conditions are identified via International Classification of Diseases-10  (ICD –10) diagnoses that are submitted by providers on incoming claims.  There are more than 9000 ICD-10 codes that map to 79 HCC codes in the Risk Adjustment model. 
  • CMS requires documentation in the person’s medical record by a qualified health care provider to support the submitted diagnosis.  Documentation must support the presence of the condition and indicate the provider’s assessment and/or plan for management of the condition.  This must occur at least once each calendar year for CMS to recognize the individual continues to have the condition.   

Why is HCC coding important?

  • Proper documentation and coding of chronic conditions is essential for funding from CMS/payors and enables appropriate risk stratification of patients.
  • Provides funding to achieve shared savings on Medicare Advantage contracts $$$
  • Used to establish financial benchmark for CMS MSSP ACO.
  • An MPP coding initiative with Blue Cross Blue Shield of Michigan, through a company called Tessalate led to an incentive payment totaling $1.5 million to MPP providers.

How can McLaren Physician Partners (MPP) help?

  • MPP is developing curriculum for coding and documentation educational programs. There will be multiple sessions throughout the year and will include varying multimedia options including live CME, webinars and self-study modules.
  • The educational objectives of this program include:
    • Discussion of Medicare Advantage and risk adjustment
    • Explanation of general guidelines that impact risk adjustments and documentation recommendations
    • Discussion of appropriate and complete documentation.
    • Explanation of Medicare Stars Measures, 2017 HEDIS updates and Member Care Alerts
    • Explanation of criteria to evaluate medical record documentation
    • Review of documentation and coding guidelines for ICD 10 coding
    • Review of clinical coding scenarios for ICD 10 coding for PCP and Specialists

For more information, contact Dr. Michael Ziccardi, Medical Director, at Michael.ziccardi@mclaren.org or (248) 484-4923.