Hierarchical Condition Categories Drive Disease Payment

By Laura Smith, CPC, CPC-I

In 1997, Congress passed the Balanced Budget Act (BBA), which mandated risk adjustment methods to improve payment accuracy. Where previously CPT® codes drove payment, diagnosis codes and accurate documentation became the determining factors. As such, it became even more important for providers to sharpen their documentation proficiency and coders to fine tune their ICD-9-CM coding expertise. Complete and concise documentation and accurate coding are key elements to medical facility success—today more than ever.

Get a Clear Understanding of Risk Adjustment

Risk adjustment is a method of adapting payment to medical assistance organizations using hierarchical condition categories (HCCs). HCCs are diagnoses selected for this payment method based on factors influencing patient care. Some of these factors are age, demographics, disability, and chronic conditions. There are only limited selections of diagnosis codes included in the Centers for Medicare & Medicaid Services (CMS) HCC model. Disease hierarchies are a way to determine the severity of a disease, which is used to drive payment for the most severe disease manifestations—the sicker the patient, the higher the reimbursement is.

Provider documentation ensures patients’ health status is conveyed accurately and completely while capturing appropriate reimbursement. The MA organization’s ability to pay providers is driven largely by the reimbursement they receive from their state and from CMS.

Is your provider assessing all chronic health conditions such as hypertension, chronic kidney disease, depression, etc., at least once a year? If not, you are not receiving the reimbursement due to your facility—even if your provider is actively treating these conditions.

Is the provider listing all coexisting conditions such as diabetes mellitus and congestive heart failure or chronic obstructive pulmonary disease and congestive heart failure? These and other condition combinations increase the cost to care for the patient and, if not documented, cannot be coded. Ultimately, this decreases your reimbursement.

Providers also need to ensure they completely document these conditions—not just stating their existence. For example, a provider may list “history of …” for conditions considered as chronic. Documentation such as this will not qualify those diagnoses for capture. This is a common problem in the electronic medical record (EMR), when providers copy and paste portions of other documentation. To qualify as a diagnosis, the provider must state the status of the condition, such as “well controlled,” list a medication used to treat the condition, such as “on Diovan for hypertension,” or order further testing and relate them to the condition. The key is for the provider to show that he or she has assessed or addressed the condition, and that it is still a current or ongoing disease.

To ensure appropriate reimbursement, the coder should review completely the documentation for any chronic conditions that are not listed in the final assessment, and list all coexisting conditions as directed by the ICD-9-CM Official Guidelines for Coding and Reporting. Section IV, H. states, “List first the ICD-9-CM code for the diagnosis, condition, problem, or other reason for the encounter/visit shown in the medical record to be chiefly responsible for the services provided. List additional codes that describe any coexisting conditions” [emphasis added]. Section IV, J. Chronic diseases states, “Chronic diseases treated on an ongoing basis may be coded and reported as many times as the patient receives treatment and care for the condition(s).”

CMS’ HCC risk adjustment methods follow standard ICD-9-CM coding guidelines, so there is nothing new as far as following proper coding practices. If coders aren’t informed of the importance of capturing chronic conditions, however, they are less likely to go the extra mile to ensure chronic conditions are being assigned to the claims. This is not, by any means, a reflection on the coder’s ability or knowledge. Claim filing time constraints, facility policies, and numerous other factors limit the time coders have to spend on abstracting the provider’s documentation to capture these chronic conditions.

For this reason, many MA health insurance providers establish methods to capture these conditions whenever possible. By reviewing claims data as it comes in, using software developed to pull certain information out and reviewing potentially related services such as tests, labs or medications they can then compile a list of members’ charts to review at the facility and attempt to capture any missed chronic conditions. This information also can be (and often is) used to ensure their members receive the care they need for these conditions to increase the quality of care. These chart reviews are conducted by experienced coding professionals who must follow all standard coding guidelines and more.

The good news is: Reviewing chart and data offers coding professionals yet another possible career path.

Laura Smith, CPC, CPC-I, is reimbursement specialist for a Mass. health insurance provider in Minnesota specializing in risk adjustment and education. She has 12 years coding experience including E/M coding, dermatology and medical oncology. She offers an occasional AAPC pre-certification class at the local technical college in Bemidji, Minnesota. She started the AAPC local chapter in Bemidji and is president.

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