Healthcare organizations need to make crucial decisions based on the perceived risk of their patient populations. To do this, organizations need a complete picture of their population. Hierarchical condition categories (HCCs) identify risk for a patient over an entire year, across all inpatient, outpatient and physician office settings by tracking the diagnoses for which a patient is treated, evaluated and monitored. HCCs are captured based on what is coded and billed so the accuracy of this information is paramount.
HCCs are not new, but many organizations are only starting to recognize their importance. They now see that their overall HCC score, the risk adjustment factor (RAF), needs to be accurate to represent the disease burden of their population.
Why is it vital to manage HCCs precisely?
Because many public and private payers use HCC/RAF risk adjustment in complex reimbursement formulas and value-based purchasing contract negotiations with hospitals. HCCs help determine how sick a patient population really is. Medicare Advantage plans have long used this method to determine risk, but now others, such as Accountable Care Organizations and health plans, use this methodology as well. CMS uses HCCs as a factor in calculating the total performance score under the Hospital Value-Based Purchasing Program to risk adjust the Medicare spending per beneficiary.
HCC methodology assigns a patient’s clinical conditions into groups, each with an associated weight. The weights for all of a patient’s reported HCC diagnoses are added into the disease risk score, including interactions among disease categories. The disease risk is combined with a demographic risk score to determine the overall RAF score, which predicts the cost of caring for a patient (or population). The focus must be to accurately identify the risk, not to artificially inflate what is reported to push for the highest risk possible.
The HCC/RAF model assigns the highest scores to the sickest patients, while lower RAF scores suggest healthier patients. But lower RAF scores could also indicate missing or inaccurate documentation, or a gap in doctor visits or annual updates of chronic conditions. If the patients with lower RAF scores are actually sicker, not healthier, then the hospital’s performance profile suffers—showing, inaccurately, patients with poorer outcomes and higher-than-expected costs.
On the other hand, a former breast cancer patient could be reported as “having” cancer, when she should be reported having a “history” of breast cancer, which is not an HCC. Similar issues arise with other acute conditions such as stroke. While stroke is reported during the year it is acute, after that time it is only reported if there are residuals such as hemiplegia. Because the RAF score is based on coded and reported data, the accuracy of this information is imperative.
Documentation and coding errors, though unintentional, distort the picture of patient care. Busy physicians or office administrative staff in physician practices may be working with outdated drop-down lists or unable to access patient information in disconnected electronic medical records. Professional coders know the coding guidelines to follow when reporting diagnoses and procedures, but physician office staff or physicians themselves can lack this knowledge. Whatever the cause may be, if we don’t have accurate and complete information, we can’t effectively manage a patient population.
So what can be done?
First, you can emphasize proactive management of HCCs, rather than retrospective analysis alone, to help your organization stay compliant. A clinical documentation improvement program for outpatient and physician practices can identify missing documentation. You can start by establishing an HCC oversite committee, do your research with an HCC coding review to determine your current state, then educate on HCC details and find out what is commonly missed. Then prioritize how you will address the issues you find.
HCC software tools can help you identify patients with HCC gaps, make lists of patients not seen this year or provide key highlights of visits. Then you can alert physicians when patients need to be scheduled for renewed treatment or to check if conditions are still chronic. For example, an oncology practice can determine if documentation and reporting are accurate for patients they see for active treatment of primary or secondary cancers.
Capturing more accurate diagnoses will improve the risk-adjusted data used to measure clinical and financial outcomes. Documentation that identifies treatment, evaluation and monitoring of all conditions will assist in management of the care of these chronic diseases over time.
Donna M. Smith, RHIA, is a project manager with 3M Consulting Services. With more than 35 years of experience in health information management, Donna drives new consulting service development for 3M Health Information Systems and advices on content for educational programs and software systems. An expert on CDI implementation and coding validation and a AHIMA-approved ICD-10-CM/PCS trainer, she is a sought-after speaker and workshop leader at industry conferences including AHIMA, HFMA, ACDIS and many others.
Donna M. Smith, RHIA