ICD-10 and HCC: Overlooked Codes That Alter Your Income

Greg A. Hood, MD


October 01, 2015

ICD-10 and HCC Codes: The Big Move

The Huge Change Is Here

Every once in a while in life, one goes through a big move. It can be because of moving houses, or changing jobs, or...because every diagnosis code that has ever been entered in a patient's chart has been mandated to be changed to an entirely new list of codes. When a move happens, it can be an opportunity gained, or an opportunity lost.

Most people, when they move, just transport their old stuff from one place and dump it in the new place. Sometimes, though, there's a great opportunity for a real spring cleaning—an opportunity that will really make a difference if it's truly seized.

Such an opportunity is rapidly approaching, within the transition to the tenth edition of the International Classification of Diseases (ICD-10), regarding the hierarchical condition categories (HCC).

HCC codes have been affecting insurance products and physician reimbursements for years, though most clinicians have underappreciated them at best or more plainly ignored them. They've been a cornerstone of` reimbursement for Medicare Advantage plans for over a decade.

Because HCCs, which are gathered from encounter claims data, are used to estimate predicted costs for plan members in the year to come, they're integral in calculating benchmarks for accountable care organizations (ACOs) as well as for the hospital value-based purchasing program.

The HCCs (or lack thereof) are one of the types of data that contribute to the odds of a plan achieving shared savings in future years, because they affect the Centers for Medicare & Medicaid Services' (CMS') risk estimate of how much patients should incur in expenses. Simply said, they expect that sicker, more complex patients should cost more money. If CMS doesn't know that an ACO's patients are more ill because HCCs haven't been appropriately utilized, then CMS will set the organization's benchmark lower than it would have had it known otherwise. Consequently, it'll be more difficult for the ACO to exceed the target CMS sets.

Therefore, even ACOs that don't sign on for "downside risk" are nevertheless inherently assuming risk within their documentation and coding. It's essential, then, that accurate coding be pursued, because those who fail to capture their codes most appropriately risk lower ACO payments.


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