If you understand the importance of Hierarchical Condition Category (HCC) codes but don’t know where to start with this complicated but critical element of coding in a value-based world, there is a light at the end of the tunnel.

HCC coding, which we introduced (or reintroduced) in our previous blog, What is HCC Coding? Understanding Today’s Risk Adjustment Model, is a definite “need-to-know” for physician group practice leadership, clinicians, and coders — not only to understand HCC codes but also to be prepared to take action.

Once you have a handle on what HCC codes and risk adjustment factor (RAF) scoring is all about, the next step is to create a workflow within your practice to make it easy to implement. With the transition to value-based care moving ahead full steam, here is what you need to know to stay on track with this fast-moving train.

Make some headway: Understand why HCC Codes are important

The most important thing to know about the HCC coding model is currently a prospective way of coding, meaning that the patient diagnoses over one year are used to predict medical costs for the following year.

What you do now will impact your future reporting on the relative health of your patient population as well as reimbursements from insurance plans in risk-based agreements. Because value-based care is about treating patients with a whole health approach, it’s important for providers to document to a high level of specificity (side note – they should already be doing this, but in truth, we all know there is room for improvement), which gives the broadest, fullest “picture” of a patient’s health.

For example, the table below illustrates the disease component of the risk adjustment factor (RAF) scored weight for a diabetes diagnosis and the corresponding category it would be placed in, as most codes map to an HCC. To qualify as an HCC for the year, the main condition — in this case, diabetes — would have to have been monitored, evaluated, assessed, or treated within the calendar year.

RAF scores for diabetes with acute or chronic complications have a higher associated risk score than diabetes without complications:

*Values are from the 2014 CMS-HCC model

This is precisely why specificity matters. The higher score for diabetes with acute or chronic complications adds a level of specificity, painting the most complete picture of that patient’s health and the cost of care. And, the RAF score factors into how the claim is processed and reimbursed by payers.

Get on the fast track: Take action on HCC Codes

Knowing about HCC and even understanding its importance in value-based care isn’t enough.

Here are concrete steps you can take as a “fast track” to integrating HCC fully.

Provide education — Make sure your physicians and coders are properly documenting and coding for HCCs, and that your leaders understand why it is important. Keep up to date on the latest information from CMS and nationally recognized coding organizations (AHIMA and AAPC), because the rules are always changing in healthcare. There are also many guidelines to follow for compliance to avoid issues with regulatory laws. It’s also important for everyone in your organization to understand the impact that HCC coding will have on value-based reimbursement.

Help your physicians manage their time — Reviewing historical medical records and planning coordination of care are already time-consuming, and now specificity is more important than ever. A patient with a complex or severe diagnosis or a chronic illness often takes much more of a clinician’s time to treat and document. Even when your coders are well-versed in HCCs, if the physician’s specific level of documentation required for HCC coding isn’t thorough enough, coders cannot assign the appropriate HCCs.

Seamless processes — Is your practice set up to create a workflow-oriented toward more thorough documentation without additional burden on the providers? It might make sense to assign coders to prepare charts and do the research on the medical history prior to patient visits so your physicians will be better prepared for the patient and save time on the front end.

Technological updates — If there is a system utilization issue with your EHR, you may need to invest in a technology update, or look for some help in identifying issues to move through EHR documentation workflows appropriately and efficiently with the proper focus on reporting capabilities. Additionally, some EHRs have built-in functionality to assist with HCC coding. Other firms sell bolt-on technology to work with your practice’s EHR. Keep in mind that technology is never a replacement for smart brains and painstaking attention to detail.

Don’t fall by the wayside: Implement changes now

If thorough documentation to the highest degree of specificity is not met, and your practice’s reporting of patients’ complex, severe and chronic conditions are inaccurate, there will be a major impact on future abilities for care delivery as well as revenue opportunities in risk-based agreements.

Aside from the potential reimbursement ramifications, prioritizing HCC coding will bring a positive change and form a more complete picture of your patient population, and it will help you deliver cost-effective treatments while aligning to manage chronic conditions across your patient population.

The Bottom Line

Working toward more engagement and education among healthcare professionals and coders within your organization can lead to clear advantages in both revenue cycle performance and patient care. Gauging where you are now by auditing current patient documentation records for HCC compliance is a great first step to getting on the right track toward HCC coding.