Will HCCs ‘disrupt’ the coding industry and take it in a completely new direction?
Hierarchical Condition Categories (HCCs) are utilized by Medicare Advantage and Affordable Care Act payers for approximately 30 million individuals currently. Use of HCCs is projected to grow significantly in coming years and individuals with in-depth knowledge and command of the HCC system will be needed to ensure coding is accurate, supported by documentation, and that reimbursement is appropriate. We asked six experts what they thought about the challenges and opportunities provided by the accelerating move toward risk adjustment payment models.
In the first installment of this discussion, several of the experts discuss the most important coding concepts for CDI specialists to master. (See the series in its entirety here.)
ERAMO: Will HCCs ‘disrupt’ the coding industry and take it in a completely new direction?
“Risk adjustment isn’t a disruption—it’s simply the next progression for coding professionals.”
-Rose T. Dunn
DUNN: Risk adjustment isn’t a disruption—it’s simply the next progression for coding professionals. In some ways, the writing has been on the wall. In 1988, Congress had extensive discussions about a diagnosis-driven reimbursement system with episodic-based payment rendered to the most significant provider of care. At the time, this goal was unachievable because hospitals were the only provider that reported an ICD-9-CM diagnosis code. Fast forward to today, and all providers submit diagnosis codes. Even skilled nursing facilities are moving to a diagnosis-based payment as of October 1, 2019. Providers are also more coordinated than they ever have been in the past thanks to Accountable Care Organizations (ACO) in which entities come together to provide the total continuum of care for patients.
“…with value-based payments, physicians can’t rely on uncredentialed staff to assign diagnosis codes. There’s too much at stake for the physician and the organization at large.”
-Bonnie S. Cassidy
CASSIDY: It’s not a ‘disruption’ per say because HCCs are rooted in ICD-10-CM. As the healthcare industry continues to make the monumental shift from volume- to value-based payment, HCCs will play an increasingly essential role in a hospital’s financial viability. What’s different is that physician practices will need to employ skilled, credentialed CDI specialists and coders. This is a big change. For years, physicians focused primarily on CPT codes to support fee-for-service reimbursement. Now, with value-based payments, physicians can’t rely on uncredentialed staff to assign diagnosis codes. There’s too much at stake for the physician and the organization at large.
MALONE: I don’t think HCCs have disrupted the coding industry per say, and I don’t think they will unless and until physician compensation is based solely on diagnosis codes rather than Relative Value Units (RVU). Until this happens, physicians will likely continue to focus on the CPT code and only document the reason for the visit. They won’t capture all of the other conditions that are present.
TAYLOR: ‘Disrupt’ is a strong word, though I do believe that any time a regulation affects the way in which physicians document, the coding industry must adapt accordingly. In many cases, outpatient coders will assign far more codes than they ever did in the past, and they’ll also take on a new task: querying for diagnoses.
MURPHY: Some of the disruption has already happened. Medicare Advantage plans started using CMS HCCs in 2004. HHS HCCs came a decade later. However, we’ve yet to move the needle on physician reimbursement. With physicians, diagnosis codes have always been secondary to procedure codes. With risk adjustment, though, diagnoses are directly linked to revenue. Over-reporting HCCs (e.g., reporting conditions that are resolved [e.g., cancer] or reporting conditions that aren’t supported by clinical indicators) can also lead to costly takebacks and penalties. The ‘disruption’ may come once physician payments are aligned with HCCs.
“How can we keep patients out of the hospital or provide care at a less expensive site? HCCs help us accomplish these goals.”
-Laurie M. Johnson
JOHNSON: Clearly things are changing. We’ve been in the DRG world for 37 years this October, and now we’re shifting to a payment methodology that looks at the patient holistically. How can we keep patients out of the hospital or provide care at a less expensive site? HCCs help us accomplish these goals.
Bonnie S. Cassidy, MPA, RHIA, FAHIMA, FHIMSS, President of Cassidy & Associates
Rose T. Dunn, MBA, RHIA, CPA, FACHE, Chief Operating Officer, First Class Solutions, Inc.
Laurie M. Johnson, MS, RHIA, FAHIMA, Senior Healthcare Consultant, Revenue Cycle Solutions, LLC
Donna Malone, CPC, CRC, Director of Coding and Provider Education, Enterprise Risk Adjustment, Tufts Health Plan
John Murphy, MBA, Principal, Risk Adjustment Consulting
Earshler Taylor, RHIA, RHIT, CCS, CDIP, CPC-I, COC, CPC, Chief Executive Officer, Earshler Taylor Consulting
Lisa A. Eramo, MA, moderator and freelance writer
Fundamentals of HCC Coding
Go beyond just the diagnoses — really understand the methodology behind HCCs! Prepare for the future of healthcare reimbursement with “Fundamentals of HCC Coding,” by nationally recognized HCC authority Rose T. Dunn, MBA, RHIA, CPA, FACHE. Learn more here.