Are HCCs the Mandatory Payment Method CMS is Looking For?

by Rose T. Dunn, MBA, RHIA, CPA, FACHE

Centers for Medicare & Medicaid Services Administrator Seema Verma said Thursday that while the Trump administration has focused on voluntary payment models, that is likely to change… To date, CMS has launched new voluntary bundled payments, primary care models, updates to accountable care, payment models for drugs and other value-based arrangements. Verma didn’t specify in what area the agency was developing new mandatory models. FierceHealthcare, Apr 25, 2019 3:08pm

The Federal Government must do something by October 1, 2019 or we’ll see another shutdown. They really have limited choices: Cut spending by several hundred billion dollars or raise the debt ceiling. With healthcare approaching 20% of GNP and the government footing much of the bill, the healthcare industry has a bull’s eye on its forehead.

Voluntary payment models offer great potential in controlling costs, but have not been widely embraced by providers and the industry. In Secretary Verma’s speech, she commented regarding voluntary models that “only the providers who see that they may benefit financially are likely to join on their own.”

Mandatory payment models may be the necessary solution. These new models offer the promise of reeling in costs for the Government allowing them to cut overall healthcare spending.

Perhaps HHS should consider expanding their HCC model to healthcare facilities.  This would introduce some simplification to the process of coding, standardize the rules across all providers, and allow the Government to focus on a single coding approach to evaluate effectiveness and efficiency.

Using payment models that focus on the severity of illness and risk of mortality, such as APR-DRGs (or some similar approach that isn’t proprietary), and HCCs could be solutions. Whatever CMS implements, the ideal payment structure would reward those providers demonstrating quality outcomes based on the level of morbidity in their total patient population.


Fundamentals of HCC Coding
Complete and accurate coding for Hierarchical Condition Categories (HCCs) presents an opportunity for improved data quality and appropriate reimbursement. Learn how from nationally recognized HCC expert, Rose T. Dunn, MBA, RHIA, CPA, FACHE.

About the Author

Rose Dunn
Rose Dunn is the Chief Operating Officer at First Class Solutions, Inc., a healthcare information management leader since 1988. Rose is the author of “The Revenue Integrity Manager’s Guidebook” available from the National Association of Healthcare Revenue Integrity and other books on Coding Management and Auditing from HCPro. She engaged herself in ICD-10 more than 10 years before it was implemented. She is assisting Libman Education in the development of an HCC educational program. Rose holds a BS and MBA from Saint Louis University.

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