HCC Coding: 10 Tips for Top Scores

The changes currently taking place with respect to data collection, coding, and billing are some of the most significant transformations in the history of the Medicare Advantage (MA) industry. That makes it more critical than ever for physicians - and physician groups - to put enhanced focus on not only the accurate and timely capture of data but on tracking a patient's care and condition over time. Those physicians able to do this in a clear and consistent manner will be taking a major step toward ensuring that their practices remain profitable and relevant in the post-Affordable Care Act world.

The stakes are particularly high for physicians caring for patients enrolled in Medicare managed care plans. The guidance issued in April 2014 by CMS calls for reductions ranging from 1.9 percent to 3.65 percent in rates paid to privately run Medicare plans. These reductions have a trickling effect, which is why physicians across the country are already bracing for yet another round of reduced revenue. Physician groups, along with the MA plans with which they work, stand to collectively lose significant dollars in revenue if they don't quickly learn how to adapt to the new environment.

One of the best ways to combat these reductions is to focus on Hierarchical Condition Category (HCC) coding. Since 2004, Medicare has used the HCC model to calculate payments to providers and health plans, but the sad truth is that most MA plans and their aligned physicians continue to miss significant opportunities to serve their members and maximize their revenue potential because of poor performance in this area.

The good news is that it need not be that way. Here are ten tips to HCC coding that are designed to provide greater efficiencies and enhanced quality and revenues for physicians serving the MA market:

1. As a medical group or independent practice association, you are most likely sending data electronically to your contracted health plans. If you are using an electronic data interchange (EDI) vendor, have a discussion with them to make certain you receive reports on rejected items. Also ask them to verify the maximum number of diagnosis codes they capture and transmit to your health plans. You may be able to locate diagnosis codes, otherwise lost, that will positively affect your revenue.

2. Find out if new patients already have assigned HCCs from their prior health plan. If so, be sure that you maintain those (if appropriate) moving forward. Doing so will assist with both continuity of care and comprehensive data collection.

3. Chart reviews offer great opportunities for in-service education or even the creation of educational materials. If your chart review uncovers common documentation errors, use this as an opportunity to develop training guides or even one-on-one training with physicians and office staff. In short, don't think of chart reviews as an end, but rather a beginning.

4. New tools on the market make it easier than ever to track diagnosis data for terminated patients. Revenue can be re-captured for members that may have initially appeared on your monthly eligibility reports, but no longer appear because the member's eligibility has ended. This is one of the most common areas for lost revenue and one that is worth renewed focus.

5. CMS expects member's conditions to be documented and assessed each year. For that reason it is important to monitor each member's HCCs for consistency in reporting. Pay particular attention to patients whose HCCs may be dropping as this could be an indication of gaps in care or in failing to accurately document services that were provided. Remember, CMS reimburses because resources were expended, as evidenced by documentation in the medical record, not because a member has a chronic condition.

6. Each October, new diagnosis codes are added and old ones deleted. Make sure you are using the most up-to-date codebooks to ensure that you are using the most current diagnosis codes. The cost of a codebook is minimal compared to the financial benefit.

7. Know how many diagnosis codes your claims system is capable of storing. Data is often lost merely because your system does not have a place to hold it. To ensure you are receiving accurate reimbursement, you must be able to capture and send all diagnosis codes from your claims and encounters.

8. While utilizing the ANSI-837 claims format may make you HIPAA compliant, the process may not be capturing all relevant clinical information. In some cases, providers and EDI vendors have mapped their legacy transaction set to the new format. This results in capturing the original nine codes - one primary (plus eight secondary) diagnoses - and continues to omit diagnosis 10 and beyond. Don't let this happen to you.

9. Often payable claims take priority over encounters due to the federal regulations on timely payment of claims. If you are close to a CMS sweep, make sure there is no backlog of encounter data unprocessed, which could have detrimental effects on your revenue.

10. Your appeals department receives full medical records. Have a coder review them to see if there are any additional diagnostic codes to be found that will have a positive impact on your HCC scores.

In an era of accelerating medical costs and reduced payments from CMS, concentrating on HCC coding and documentation is one of the best ways to eliminate gaps in care and ensure money isn't being left on the table. This is what everyone wants and with the right focus and tools, it can be done.

Pam Klugmanis vice president and chief operating officer of Clear Vision Information Systems, one of the nation's leaders in offering Medicare Advantage risk adjustment solutions and strategies to providers and health plans nationwide. E-mail her here.