Five Action Items to Improve HCC Coding Accuracy and Risk Adjustment With Analytics
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The document outlines five key action items to enhance HCC coding accuracy and risk adjustment in healthcare organizations, crucial for fair reimbursement in the growing Medicare Advantage market. It emphasizes the importance of accurate documentation, effective interdisciplinary workgroups, and leveraging data for improving care delivery for complex patient populations. By optimizing EMRs, providing education, and tracking performance, organizations can improve financial viability while ensuring higher quality care for their patients.
Five Action Items to Improve HCC Coding Accuracy and Risk Adjustment With Analytics
- 1. Five Action Items to Improve HCC Coding Accuracy and Risk Adjustment With Analytics
- 2. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. As enrollment in Medicare Advantage plans increases, healthcare organizations need to be able to anticipate future healthcare financial resources and predict appropriate reimbursement for physicians. Coding Accuracy and Risk Adjustment
- 3. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. The Hierarchical Condition Category (HCC) risk adjustment model is used by CMS to estimate predicted costs for Medicare Advantage beneficiaries, and the results directly impact the reimbursement healthcare organizations receive. The HCC risk adjustment model was originally implemented in 2004, but is becoming more prevalent as value-based payment models gain popularity. Coding Accuracy and Risk Adjustment
- 4. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. The HCC model assigns a Risk Adjustment Factor (RAF) to each Medicare patient as measurement of probable costs, which is then used to adjust capitation payments for patients enrolled in Medicare Advantage plans. Accurate HCC coding and risk adjustment can have a significant impact on healthcare organizations’ financial viability and care delivery. Coding Accuracy and Risk Adjustment
- 5. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. CMS requires that all qualifying conditions be identified each year by provider organizations. Documentation linked to a non-specific diagnosis, as well as incomplete documentation, negatively affects reimbursement. Healthcare organizations that optimize their EMR, data, analytics, and education can enable better documentation of care for patients with chronic diseases, leading to more accurate HCC risk adjustment coding. HCC Model Complexities and Risk Adjustment Use
- 6. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. The number of Medicare Advantage beneficiaries has continued to rise over the past ten years, with roughly one-in-three Medicare beneficiaries now enrolled in a Medicare Advantage plan. As with starting any new initiative, HCC coding is not intuitive, but accurate HCC coding is necessary for healthcare organizations in order to receive fair compensation. HCC Model Complexities and Risk Adjustment Use
- 7. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. There are a few highlights to know about the CMS HCC model complexities and risk adjustment use: CMS requires an encounter each calendar year and diagnosis by an APRN, PA or physician. Documentation must be accurate and support the diagnosis. Some codes have RAF value. Some do not. Increased severity doesn’t usually increase risk adjustment factor (RAF). HCC codes are not always intuitive. Physicians may require decision support. HCC codes are additive, and some have multipliers. Population complexity/severity affects payment in many Medicare contracts. RAF is used for benchmarking for quality and safety. RAF enables identification and stratification for patient management. HCC Model Complexities and Risk Adjustment Use > > > > > > > >
- 8. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Even though the payment model is not intuitive, an organization’s ability to perform well within this model should increase over time. For example, in Figure 1, the table shows sample patient data from a 76-year-old female patient with an RAF score of .448. The two options show how different diagnoses change the patient’s risk score, and, as a result, the annual member payment. The Impact of Appropriate HCC Coding
- 9. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. The Impact of Appropriate HCC Coding Impact of Appropriate HCC Coding on Payment Female, age 76, Not: originally disabled, Medicaid, ERSD, or institutionalized, Demographic RAF score = .488 Option 1 HCC Risk Score Obesity 0 Type 2 diabetes, exudative retinopathy .104, 0 Major depression disorder, Single episode, unspecified 0 CHF .323 Asthma 0 Pressure ulcer of right heel, unspecified 0 CHF*DM .154 RAF score: 1.029 Sample MedicareAdvantage member payment,Annual: $9K Option 2 HCC Risk Score Morbid obesity, BMI 42 .273 Type 2 diabetes, w/diabetic retinopathy .318 Major depression disorder, Single episode, mild .395 CHF, class 3 .323 COPD .328 Pressure ulcer of right heel, stage 3 1.204 CHF*DM; CHF*COPD .154, .19 RAF score: 3.633 Sample MedicareAdvantage member payment,Annual: $32K Figure 1: The impact of appropriate HCC Coding on payment
- 10. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. The two different options show a patient of similar complexity but varying diagnoses, which results in vastly different annual member payments. Option one showed a total RAF score 1.029 and an annual Medical Advantage member payment of $9,000. Option two showed a RAF score of 3.633 and a Medicare Advantage member payment of $32,000 annually. While physicians should not change their diagnoses, it is important to code accurately and take credit, where deserved, for serving a complex population. The Impact of Appropriate HCC Coding
- 11. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. The example provides a compelling rationale for organizations to improve their HCC coding accuracy. However, the first step is obtaining accurate data about Medicare populations before trying to make improvements in this space. It may also be beneficial to form a workgroup that is responsible for improving the accuracy of documentation and HCC coding. Driving Improvement Through Interdisciplinary Workgroups
- 12. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. This workgroup could include members of: • The analytics team • Accountable Care Organization (ACO) team • Clinicians • Clinic managers • Operations • Medical coders. Driving Improvement Through Interdisciplinary Workgroups
- 13. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Forming the workgroup can help oversee these five key action items necessary for improving HCC coding accuracy: 1. Having an accurate problem list 2. Ensuring patients are seen in each calendar year 3. Improving decision support and EMR optimization 4. Widespread education and communication 5. Tracking performance and identifying opportunities Driving Improvement Through Interdisciplinary Workgroups
- 14. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. 1: Having an accurate problem list Many healthcare organizations have been inputting data in an EMR for years now, resulting in lots of data, and most likely an inaccurate problem list. Ensuring an accurate problem list involves removing duplicative and inactive diagnoses, identifying key areas with discrete data in the EMR, and using a diagnosis preference list to include HCC suffix codes and RAF values as well as prioritize results. Driving Improvement Through Interdisciplinary Workgroups
- 15. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. 2: Ensuring patients are seen in each calendar year Driving Improvement Through Interdisciplinary Workgroups The first step is to identify patients with chronic illnesses who have not been seen during the calendar year and once found, schedule that patient for a visit. One way to do this at a glance is to build a clinical dashboard that provides a snapshot of both EMR and claims data that provides a complete picture of patients not yet seen in a calendar year. Once the workgroup can identify these patients, they can match them with both visit and HCC coding gaps.
- 16. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. 3: Improving decision support and EMR optimization Driving Improvement Through Interdisciplinary Workgroups Although educating providers is necessary to improve HCC coding accuracy, it’s also important to build appropriate coding into the daily encounter workflow. Some potential strategies include having an ACO identifier flagged in the EMR, decision- support tools that can be activated for select populations, and HCC diagnosis alerts for past codes.
- 17. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. 4: Widespread education and communication Driving Improvement Through Interdisciplinary Workgroups Because this is new work and certainly not intuitive, it’s important to educate clinicians. The biggest educational point to drive home to clinicians is not what score they should look for, but the importance of accuracy. Workgroups can educate clinicians on the clinical and financial value of specificity. They can also educate clinic staff about the specifics of the tools and workflows for patient management and reporting.
- 18. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. 5: Tracking performance and identifying opportunities Driving Improvement Through Interdisciplinary Workgroups The last, and perhaps most important key initiative of the workgroup is to track performance and identify future opportunities for improvement. Measuring results provides the workgroup with compelling data to bring to stakeholders that shows what improvements were made, such as an increase in average RAF score, improvement in key problem list diagnoses, decrease in the number of members without an annual visit, an increase in the percentage of persistent condition diagnoses resolved.
- 19. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. 5: Tracking performance and identifying opportunities Driving Improvement Through Interdisciplinary Workgroups Once the workgroup has data to bring to stakeholders, the next step is to identify future opportunities for further improvements. One place to look for these is by reviewing unresolved persistent conditions for specific populations.
- 20. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Key Lessons For organizations that are looking to embark on an effort to improve their HCC coding accuracy and risk adjustment, below are four valuable lessons learned: The magnitude and presence of coding accuracy opportunities are not evident without data. Using data to focus efforts helped find topics that were practice and valuable to end users and improve engagement. It is manageable and effective to use the EMR upstream and during encounters. Clinic staff want reports to see how they are doing compared to peers. > > > >
- 21. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Fair Reimbursement for Serving Complex Patient Populations Although HCC coding accuracy and risk adjustment requires changes to the way healthcare organizations are documenting and coding chronic conditions, doing so can help the organization capture more complete diagnoses, resulting in higher and more appropriate reimbursement and improved care delivery for complex patient populations.
- 22. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Fair Reimbursement for Serving Complex Patient Populations With increasing Medicare Advantage numbers, healthcare organizations need to improve coding accuracy to remain financially viable. Creating a workgroup that’s responsible for key action items is crucial to the success of this initiative. They can help ensure the organization has an accurate problem list, chronically ill patients are seen once per calendar year, improve decision-support and EMR optimization, educate clinicians and staff, and track performance of the initiatives to share with stakeholders.
- 23. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Fair Reimbursement for Serving Complex Patient Populations If healthcare organizations appropriately document the complexity of their patients, they are eligible for greater CMS revenue that can then be reinvested to better meet the needs of their patient population.
- 24. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. For more information: “This book is a fantastic piece of work” – Robert Lindeman MD, FAAP, Chief Physician Quality Officer
- 25. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. More about this topic Link to original article for a more in-depth discussion. Five Action Items to Improve HCC Coding Accuracy and Risk Adjustment With Analytics ACOs: Four Ways Technology Contributes to Success Health Catalyst Editors Understanding Risk Stratification, Comorbidities, and the Future of Healthcare Eric Just, SVP of Product Development Healthcare Data Management: Three Principles of Using Data to Its Full Potential Sean Whitaker Why Clinical Quality Should Drive Healthcare Business Strategy Health Catalyst Editors Linking Clinical and Financial Data: The Key to Real Quality and Cost Outcomes Bobbi Brown, MBA, SVP
- 26. © 2019 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Other Clinical Quality Improvement Resources Click to read additional information at www.healthcatalyst.com Health Catalyst is a mission-driven data warehousing, analytics and outcomes-improvement company that helps healthcare organizations of all sizes improve clinical, financial, and operational outcomes needed to improve population health and accountable care. Our proven enterprise data warehouse (EDW) and analytics platform helps improve quality, add efficiency and lower costs in support of more than 65 million patients for organizations ranging from the largest US health system to forward-thinking physician practices. Health Catalyst was recently named as the leader in the enterprise healthcare BI market in improvement by KLAS, and has received numerous best-place-to work awards including Modern Healthcare in 2013, 2014, and 2015, as well as other recognitions such as “Best Place to work for Millenials, and a “Best Perks for Women.”