Talking HCCs: Utilizing HCC Coding Data

by Rose T. Dunn, MBA, RHIA, CPA, FACHE and Laurie M. Johnson, MS, RHIA, FAHIMA

Hierarchical Condition Categories (HCCs) are utilized by Medicare Advantage and Affordable Care Act (Obamacare) payers for approximately 30 million individuals currently. Use of HCCs is projected to grow significantly in coming years. Join us for a discussion of HCCs by two industry leaders: Rose T. Dunn, MBA, RHIA, CPA, FACHE, and Laurie M. Johnson, MS, RHIA, FAHIMA.  


Laurie: For Hierarchical Condition Categories (HCCs) to be successful, the provider must report all diagnoses that impact the patient’s evaluation, care, and treatment including co-existing conditions, chronic conditions, and treatments rendered.

Correct and complete coding of these HCCs creates a lot of data. How can HCC data be utilized by the hospital or vice versa?


RoseAs you know, all coded data is used by facilities and providers alike. The HCC data, like any of our ICD-10-CM data, represents the spectrum of diagnoses or conditions that are being treated.

A spike in an area’s reporting of a condition can signal an outbreak. For instance, salmonella. If we do some data diving, we may be able to find a locus for that salmonella. That’s the fun part about our data skills, we can play CSI without having to see the actual bloody parts! Ha!

But seriously, the composition of the conditions and our Case Mix Index (CMI) should be in sync and as we treat more complex patients, the Severity of Illness (SOI) should rise as well. That means we’re doing our job.

Laurie, how would you utilize the data?


Laurie: I think that a careful comparison between Evaluation and Management (E&M) levels and risk adjustment factors (RAF) can be very insightful.

If the RAF is high and the E&M level is low, then the level and diagnosis codes should be reviewed to ensure that all diagnoses were actively treated/monitored/assessed. The coder or CDI staffs could review the record to determine if something is missing from documentation or if the E&M level should be raised.

If the E&M level is high and the RAF is low, it should be a red flag that the level may be too high. The elements for E&M assignment should be compared to the documentation to ensure that the level is correct. These cases can be reviewed for the diagnosis accuracy too. Perhaps some additional documentation to gain an HCC diagnosis is required.

It is better for the organization or practice to review E&M levels before a regulatory agency decides to complete an investigation.

Rose, it was nice chatting with you!


Rose: You too! Hope the rest of your day goes well. 




Introduction to HCC Coding  Go beyond just the diagnoses — really understand the methodology behind HCCs! Learn how from nationally recognized HCC expert, Rose T. Dunn, MBA, RHIA, CPA, FACHE.




Rose Dunn is the Chief Operating Officer of First Class Solutions, Inc., a healthcare information management leader since 1988, offering professional consulting services in health information management operations and information governance issues, as well as coding support, coding quality reviews, privacy/security guidance, temporary (interim) management, revenue cycle oversight, and accreditation preparation.  Rose is the author of Libman Education’s online course: Fundamentals of HCC Coding as well as “The Revenue Integrity Manager’s Guidebook” available from the National Association of Healthcare Revenue Integrity and other books on coding management and auditing. Ms. Dunn holds a B.S. and M.B.A. from Saint Louis University.Contact Rose at 314-209-7800 or [email protected]  


Laurie M. Johnson, MS, RHIA, FAHIMA Laurie M. Johnson is a senior consultant at Revenue Cycle Solutions, LLC, a revenue cycle consulting firm specializing in revenue cycle assessments and work plan implementation; interim management with focus on process improvement; and revenue cycle education for hospitals and physician practices. Laurie is a past president of PHIMA and author of clinical coding articles for Journal of AHIMA and ICD-10 Monitor.

Disclaimer: This article is written for educational purposes only. Every reasonable effort has been made to ensure its accuracy and completeness. It is the responsibility of the reader to refer to the definitions, descriptions, conventions, and guidelines specific to each coding classification, as well as relevant laws and regulations when selecting and reporting medical codes.

About the Author

Libman Education
Libman Education is recognized by individual HIM professionals and their employers as the trusted resource for training on medical record coding. Over 12,000 individuals enroll annually in Libman Education’s WebinarPlus™ self-paced online courses written by leading industry experts. Our focus is on coding from beginner to advanced (ICD-10-CM, ICD-10-PCS, CPT), as well as coding credential prep (both AHIMA and AAPC), and other topics where in-depth specialized knowledge of relevant coding systems and their application is essential (Auditing, CDI, HCCs, IR/CV, LTAC, SNF, Home Health, IRF, and Pediatrics).

One thought on “Talking HCCs: Utilizing HCC Coding Data

  1. Deborah M. Beiderbecke - April 11, 2019 at 7:20 pm

    I am an HIM student who will be graduating at the end of May (RHIT eligible). We had two guest speakers who just introduced us to HCCs.

    Like many new graduates, I have not yet decided which pathway to start on. Also, like many new graduates, I do not have the resources to purchase webinars, books, etc. I anticipate that over time I will have more focus to know what I want to invest in for my career.
    In the meantime, I will keep an eye on the products you are offering.
    Thank you.