2. Coding Compliance Overview
  3. Hierarchical Condition Category Coding Overview

Hierarchical Condition Category Coding Overview

HCC Scrabble Board

HCC (external link) or Hierarchical Condition Category coding is something we don’t think about too often in the Pro-fee contract arena. Our diagnosis coding is important, but we get paid based on our CPT coding.

With more payers transitioning to value-based care, it is only a matter of time before HCC contracts come knocking at the door. Even in the pro-fee environment, we contract with MCA (Medicare Advantage Plans) that use HCC coding. It is not uncommon for Medicare Advantage Plans to review their contracted providers HCC coding.

Some things you should know about HCC coding:

  •  In 2022, there are 19 different HCC Categories (external link) with 86 total HCC codes
  • CMS pre-establishes a rate for reimbursements based on (3) things:
    1. Patient demographics (age, sex)
    2. Major conditions (documented with HCC codes)
    3. Number of conditions (also tied to HCC codes)
  • RAF Score (external link) (Risk Adjustment Factor) is a medical risk adjustment model.  CMS and private payers use RAF scores to represent a patient’s health status. RAF scores are used to predict the cost for a healthcare organization to care for a patient.

Currently, we don’t get reimbursed based on HCC Coding or our patient’s RAF score, but our contracted Medicare Advantage Plans do. In turn, they scour our records to make sure we didn’t miss an opportunity to code to the highest level of specificity (external link) available.

Documentation Challenges:

• Insufficient or unspecified documentation
• Lack of HCC-specificity (external link) as a priority
• Poor problem list maintenance
• Incorrect coding (external link)

Documenting problems and conditions to the highest level of specificity known at the time of the encounter is critical for correct diagnosis coding.  The more specific, the better.  This past January, the OIG published a review that categorized the diagnosis groups with the highest risk for improper coding. Essentially, coding for acute problems that were no longer present, or not properly documented.

Yes-HIMConsulting.com (2024 CMS HCC Changes) Article here (external link). (New!)

More Light Reading:

  1. Healthcare Partners published a great resource tip sheet (external link).
  2. Brundage Group – Clinical Documentation Integrity Tips (Medical Necessity) here (external link).
  3. AAPC Risk Adjustment Tool here (external link)
  4. Chronic Conditions Data Warehouse here (external link)
  5. AAPC Risk Adjustment Tool here (external link) (membership required)
  6. NEW (August 2023) OIG Strategic Plan (external link) – MCR and Medicaid Managed Care

UTH Access Only

The HCC Team has prepared a basic presentation (HCC 101 (external link)) to supplement this article.

If your department would like additional HCC 101 training, please reach out to [email protected] or [email protected].