Importance of Documentation in HCC Coding

CMS uses the HCC (Hierarchal Condition Category) risk adjustment model for estimating the predicted costs for Medicare beneficiaries. The results have a direct impact on the revenue received by healthcare organizations for patients who are enrolled in Medicare Advantage Plan. In order to be successful in risk-based contracts, it is necessary for healthcare organizations to ensure accuracy in clinical documentation. The documentation must reflect clinical needs and diagnoses of patients and must have the necessary specificity for patient assignment to correct RAF score. Accuracy in documentation plays a huge role in helping the provider receive appropriate and timely reimbursement.

HCCs determine reimbursement on the basis of patients’ diagnosis. The main source of data is the hospital and physician claims and these drive the risk adjustment model. For best risk adjustment, it is very important to ensure specificity and accuracy in medical documentation and even subsequent ICD-10 coding.

If there is failure to properly assign risk to patients, it will impact reimbursement, potentially resulting in unfair compensation for the healthcare provided to the patient. Providers also face reduced payment in a performance-based payment model if medical documentation lacks accuracy needed for assigning the accurate diagnosis codes.

Coding guidelines prohibit the assumption of cause and effect relationships to a large extent. If the relationship isn’t well documented, it will become impossible to report it. At times, providers end up overlooking the chronic conditions. They don’t document chronic and/or permanent diagnoses as often as they are assessed or treated. CMS needs these diagnoses to be submitted at least on an annual basis for risk adjustment.

It is very important for providers to educate, monitor ad evaluate the quality of outpatient documentation and coding in their practice in order to mitigate risks.

To support an HCC, it is very important to have accurate clinical documentation in the patient’s heath record that will support the presence of the condition. It should also indicate the qualified provider’s assessment or plan for management of the condition.

There are several strategies that are used by organizations for reviewing clinical documentation. For instance, some organizations use the MEAT approach that stands for monitoring, evaluation, assessment and treatment.

Many healthcare organizations choose to outsource HCC coding services to a third party. Considering the complexities, it is helpful to let a third party handle this task because it helps in obtaining timely reimbursement.