Last Updated on May 2, 2022 by rabiamuzaffar
This article outlines facts about hierarchical condition category coding, the new ICD-10-CMS coding system, and the meaning of the HCC codes. In addition, this article will explain the importance of HCC codes in the ICD-10-CMS system and the implications for future health care costs. These facts about Hierarchical Condition Category Coding (HCC) will help you make more informed decisions regarding your health care.
ICD-10 Hierarchical Condition Category Coding
In the ICD-10 system, a patient’s diagnosis is coded according to their ICD-10 condition. A patient with various needs is grouped into a hierarchical condition category. This type of coding enables clinicians to communicate complex patient information and paint a more accurate picture of the entire patient. This system is also helpful in measuring costs, performance, and quality of care because it can account for the social determinants of health and patient complexity.
The ICD-10 system includes several groups of codes: diagnosis, condition, and risk adjustment factors. Each condition category in the ICD-10 system has a specific numeric code, known as an HCC. These codes translate into the risk adjustment factor value for that particular diagnosis. This risk adjustment factor score varies based on the patient’s influencing factors and diagnosis. Because of these differences, medical practices must carefully follow the coding rules for each diagnosis code. Failure to adhere to these rules can result in incorrect risk level assignments and affect future payments.
CMS Hierarchical Condition Category Coding
Before CMS launched its new CMS Hierarchical Condition Category Coding, long-term care providers needed to know only the current procedural terminology codes to code the intensity of patient care. But the US health system is shifting from fee-for-service reimbursement toward value-based care and new payment models. As providers try to make the change, it’s important to educate themselves on new coding options and evaluate the evolution of their organization. Here, columnist Richard Stefanacci offers his perspective on how HCC can help long-term care organizations.
CMS implemented Hierarchical Condition Category (HCC) coding in 2004 to account for the costs of chronic medical conditions. HCCs are specific disease categories organized by body systems and similar disease processes. The idea behind HCCs is to provide further weight to chronic conditions, such as diabetes, by accounting for the actual cost of the disease. These codes accurately reflect a patient’s condition and predict future healthcare costs. Furthermore, CMS has rewarded providers with high experience in HCC coding.
Impact of HCC coding on future health care costs
The American Academy of Family Physicians recommends using HCC coding for patients. HCC coding enables a risk adjustment factor (RAF) assigned to each patient. With this risk factor, insurance companies can better predict costs by calculating a patient’s likelihood of needing costly medical treatment. For instance, a healthy patient may have an average RAF score, whereas a patient with multiple chronic conditions would likely have a higher RAF score and higher costs.
Physicians often focus on the patient’s diagnosis presented to the physician, and they tend to ignore chronic conditions, which affect RAF scores. This means that patients may have various chronic diseases which are not documented or coded. This can result in inaccurate data. In addition, physicians are not coders, so their data can be incorrect and increase future health care costs.
Meaning of HCC codes in ICD-10
CMS uses hierarchical condition categories (HCC) for coding and risk adjustment purposes. These codes reflect the complexity of patient health and care and are essential in assessing the value of care. The new system requires medical practices to adhere to strict rules when selecting diagnosis codes. Failure to do so could result in incorrect risk level assignments and negatively affect future payments. This article will explore the differences between the new system and its predecessors.
The new ICD-10 version of the ICD has mandated more specificity for HCC coding. As a result, caregivers must dive deeper into the diagnosis and treatment of each HCC. In addition to the diagnostic process, HCCs include chronic conditions, such as alcohol dependence and artificial openings. Understanding these codes is essential for payers, CMS, and patients. However, it is vital to remember that HCCs are not a replacement for ICD-10.