Guest post: Time to learn about HCCs

by James S. Kennedy, MD, CCS, CDIP

Now that you’ve finally mastered coding compliance with DRGs and quality measures, now it is time to learn the new risk-adjustment method, Hierarchical Condition Categories (HCC).

HCCs are to physicians what DRGs are to hospitals and, as such, are subject to government and Recovery Auditor scrutiny. In fact, a whistleblower accused United Healthcare of “upcoding” ICD-10-CM diagnosis codes affecting HCC-derived risk-adjustment factor scores, mentioning that CMS overpaid insurers by $14.1 billion in 2013 alone, according to an article in the New York Times in May. HCCs are relative weights or coefficients tied to individual or combinations of ICD-10-CM diagnosis codes submitted by physicians and hospitals (but not skilled nursing facilities, home health agencies, or diagnostic centers) within a specified time period (usually a calendar year) that add expected cost to a certain patient or episode of care. In many respects, they are similar to the condition categories used by Yale in CMS’ mortality, readmissions, and complications reduction programs, but they differ in that certain conditions “trump” similar but less severe conditions when reported in a certain time frame.

For example, if a patient has metastatic cancer, this diagnosis code trumps all other malignancy codes that are not metastatic. Diabetes with complications trumps diabetes without complications. Acute kidney injury trumps chronic kidney disease, stages 4 or 5. Consider this table demonstrating HCC’s effect on an ambulatory Medicare patient.

A list of all of the 2017 ICD-10-CM codes and their impact on HCCs is available here. Other information is available at www.hccuniversity.comor similar websites.

Editor’s note: Dr. Kennedy is a general internist and certified coder, specializing in clinical effectiveness, medical informatics, and clinical documentation and coding improvement strategies. Contact him at 615-479-7021 or at jkennedy@cdimd.com. This article originally appeared in Briefings on Coding Compliance Strategies. Opinions expressed are that of the author and do not necessarily represent HCPro, ACDIS, or any of its subsidiaries.