HCC Coding | December 2021 | Clinical Corner

December 15, 2021

HCC (Hierarchical Condition Category) Coding

The goals of value-based care programs are lowering health care costs and improving patient outcomes. Identifying patients at high risk of serious health events such as emergency department visits or inpatient admissions and preventing them is one way to reach the above goals. The McLaren High Performance Network ACO and the MPP Medicare Advantage gainsharing contracts are examples of value-based contracts. Regulatory agencies and payers use hierarchical condition categories (HCCs) to calculate patient risk; the higher the risk score for a population, the higher the benchmark will be for expenditures, which can affect shared savings in value-based payment arrangements.


HCC Key Points:

  • All diagnosis codes do not map to an HCC code, but those that do carry more weight in your patient panel. Failing to use accurate diagnosis codes can underreport your patients’ severity of illness, which can affect reimbursement in value-based care arrangements.
  • Accurate diagnosis coding can help your team identify high-risk patients and give them the right care at the right time.
  • HCC codes reset annually, so diagnoses that remain active need to be reported every calendar year (starting January 1st) for each patient. They only need to be reported once but must be reported each year, regardless of how long the patient has had the condition.
  • Avoid unspecified diagnosis codes. Most unspecified codes do not risk adjust, so use the most specific code possible for each diagnosis. For example, if you’re coding all your patients with type 2 diabetes using ICD-10 code E11, you’re not capturing the true risk for those who have type 2 diabetes with diabetic chronic kidney disease (E11.22) or type 2 diabetes with hyperglycemia (E11.65).
  • Physicians should avoid using symptom codes if a specific diagnosis code can be used instead. For example, don’t simply report “other chest pain” (R07.89) if the patient has unspecified angina (I20.9). Symptom codes do not risk adjust, but many diagnosis codes do, including all angina codes.
  • Documentation is key. Remember the acronym MEAT to document that you monitored, evaluated, assessed/ addressed, or treated the condition to code for the diagnosis during that visit.


  1. Fam Pract Manag. 2021 Nov-Dec;28(6):6-9.
  2. https://www.aafp.org/fpm/toolBox/viewToolType.htm?toolTypeId=30