As we transition into value-based care, understanding HCC coding has become essential for organizations to succeed in new payment models. HCC coding, as a quick reminder, allows providers and billing/coding teams to account for future health risk and cost at the patient level. In our experience, most practices’ utilization of HCC coding is disjointed, unclear, or possibly non-existent.
No two patients are the same. HCC coding, if used correctly, communicates a patient’s health status and future risk to payers. In turn, CMS and other payers use the risk adjustment to determine the payments they will make to care for a patient based on their complexity and risk for future disease and cost.
For innovative programs like Primary Care First, HCC accuracy has an impact on program success. If your patients are not properly coded, your patient panel could be assigned the wrong risk group. Inaccurate risk grouping has huge financial implications for the prospective payments your organization receives.
How can you know if you’re not utilizing diagnosis codes to achieve maximum benefit?
- Your PBPM may be less than you expected in Primary Care First.
- You aren’t conscious or intentional about using diagnosis codes – your organization doesn’t have a workflow or strategy in place concerning coding.
- You don’t know if a diagnosis code was addressed year over year.
- You may not realize that different diagnosis codes carry different specificity and weights concerning risk adjustment for a single condition. A great example of this distinction is in coding for Diabetes. Diagnosis codes for patients with diabetes have 3 HCC groups. Each group has a different weight or estimated future cost.
Why does this matter?
Accurate risk grouping is a significant factor in your financial success or failure when accepting risk in value-based care contracts, such as Primary Care First. For example, risk grouping determines the per beneficiary per month (PBPM) payments your practice and organization will receive in the PCF program.
But how is risk grouping determined?
Risk grouping is determined by the average HCC score for all attributed patients. Moving from one risk grouping to another isn’t just a small bonus, either. In our experience, increased payments from accurate risk grouping can be the determining factor between success and failure in PCF.
We all know more complex patients require more advanced care which requires more money and time. A disjointed approach to HCC coding also increases the likelihood of losing critical revenue to care for your sickest patients. By utilizing HCC coding properly, organizations can provide more accurate projections of future health risks and be paid appropriately to care for their attributed patients.
Common Pitfalls with HCC Coding
HCC coding adds a layer of complexity to your coding choices, and practices that don’t approach HCC coding with a clear workflow and strategy don’t do themselves any favors. It’s important to educate your entire team on coding accuracy and establish an intentional workflow to make improvements.
A patient’s risk adjustment is calculated by the diagnosis codes attached to claims in the service year. Medicare reports up to 30% of diagnosis codes are missed from patient billing records year to year. It’s not enough to code once for an amputation — your organization needs to be applying the appropriate codes every year. A service such as Mingle Health’s Coding & Risk Analysis Tool will help you spot opportunities where codes have been dropped year-over-year.
The other challenge is having diagnostic specificity in chronic disease states. Very specific coding needs to be applied during billing for the payer to estimate the patient’s illness and complexity. It is not enough to code for diagnosis unspecified or unknown in many cases.
And finally, it’s important to note that HCC codes are not all the same – HCC coding is a system designed to account for risk based on current patient health and projected costs. For this reason, there can be multiple HCC codes utilized for a single condition – and each code can carry a different implication for health risk and payments for patient care.
What happens if you fix these problems?
At the most basic level, gaining a better understanding of HCC coding and fixing the gaps in your billing and coding will help ensure your organization is getting paid for the work you do. If you are taking care of patients with complex conditions that require extra attention but not coding specifically for the extra work you are doing, you are possibly missing revenue in value-based care contracts.
Again, increased specificity in coding provides greater transparency to payers about patient care needs now and in the future. Beyond this, fixing the problem of unspecified diagnostic coding is essential for success in value-based programs such as Primary Care First.
How is your Risk Group determined in Primary Care First?
In Primary Care First, the Professional PBP Base Rate (PBPM) is set based on the average risk score of patients attributed to your practice.
For a PCF practice, this is where HCC coding starts to have real implications.
A practice in Risk Group 1, for example, makes an estimated $49 per patient, per month.
Risk Group 4 practices, however, make an estimated $212 per patient, per month.
It’s good to take a moment here and reflect on the real implications of this difference in payment. Imagine you manage a practice that is currently in Risk Group 1. You are caring for your patients, attributing more patients through Annual Wellness Visits, and you think you’re doing a decent job with coding efforts. For this example, let’s imagine you have 800 patients in your care.
Some quick math: 800 patients x $49 per patient, per month = $39,200 per month.
And without knowing the implications of correct HCC coding, you might think this is accurate.
Your organization decides the PCF program is failing the practice because primary care still isn’t getting paid for the great work they are doing!
What if, in this example, a good portion of your 800 patient population requires ongoing, careful attention to their health needs? You care for patients with complex health conditions and serious risks associated with these conditions. Your providers do all the work to provide for patient needs, but payers don’t see how sick your patients really are and they certainly don’t pay for that care. You can’t bill for “extra effort” in Fee for Service.
Doesn’t CMS know how hard primary care can be?
Let’s say your practice begins a new effort to correctly utilize specific diagnosis coding and increase understanding of HCC and patient risk. After implementing the new strategy, you find yourself in Risk Group 4.
Again, some quick math: 800 patients x $212 per patient, per month = $169,600 per month.
This is an additional $130,000 per month. Before you implemented the new strategy, you wondered how you would keep the lights on.
Now the question becomes: “How will we use the extra revenue?”
Suddenly, your practice realizes the implications of accurate coding. The extra effort required to care for your patients isn’t going unnoticed and under-compensated.
Now you understand why you need to fix the problem. But how do you start?
Improving your utilization of HCC coding is a long process that requires specific knowledge and a dedication to continued learning. Nonetheless, you can take some steps right away to set your organization on the path to improving your HCC coding efforts.
Step One: Realize you can do something about this.
In our experience working with PCF practices, we’ve noticed a common trend: organizations don’t have an implementation plan for coding, and that’s a problem.
Beyond that, some organizations don’t recognize that they aren’t implementing HCC coding to its fullest extent. You can’t solve the problem if you don’t realize it exists.
The first step to improving your HCC coding efforts – which means increased diagnostic specificity – is to realize that you might have a problem to fix. From there, you can begin to see it clearly and start improving things. As you improve, revenue will follow – but it takes time.
Step 2: Audit your current HCC coding efforts.
A thorough audit of your current coding efforts will allow you to see where you need to focus for improvement. You know the specific team members, departments, and workflows to examine in your organization’s audit, but here are some questions to get you started:
- Are you missing codes in general year-to-year?
- Do you under-utilize or misuse specific codes?
- Are you sure that you’re implementing codes of the proper complexity and weight concerning patient health risks and reimbursement?
- Is the clinical team trained in HCC coding?
- If so, is their training up-to-date?
- Is there strong collaboration with the billing/coding team?
- Does your EHR and practice management system need further configuration?
- Which codes are used most often, and by whom?
The better your understanding of your current opportunities, the better you can plan improvements now and in the future.
Step 3: Use examples to educate your team and determine ways to improve.
To make a real improvement to your organization’s HCC coding efforts, you need to ensure your team knows how powerful the results can be. Share details with your team of how increased coding performance could impact your organization – everyone involved in the billing workflow has a role to play in making improvements. This includes clinicians, the care team, and the billing and coding team.
A renewed commitment to a complex problem like this will take the combined effort of providers and billing/coding staff. And, remember that billing/coding staff rely on accurate, detailed information from providers to do their work.
Step 4: Track your HCC coding efforts at each step of the workflow.
When you fix the small-scale components, the big picture will improve.
Payors should understand their enrollees’ health as clearly as possible. Providers can improve communication about patient health and risks to them through your billing/coding team.
Stress to your billing/coding team members that HCC coding offers a chance to improve diagnostic specificity — which means their work can provide a clearer understanding of patient health. Remind the team that different codes carry different weights concerning future patient health risks and reimbursement. And support team members in verifying and submitting missing codes year-over-year.
It could also be helpful to stress the importance of HCC coding from the patient’s perspective: if providers, coders, and administrators work together to gain a clearer picture of health risks, individual patient health will be better for it.
Here are some actionable questions to help you start tracking HCC coding efforts in your workflow:
- Are encounter notes sufficiently detailed for accurate billing?
- How many codes are added to each claim?
- Is the patient problem list complete and up to date?
Step 5: Build systems to focus on coding accuracy and tracking efforts over time.
What gets measured, gets improved. If you want to start improving something, build a straightforward system to measure and track efforts. Creating a repeatable, measurable approach for HCC efforts allows you to quickly and easily see where you are missing the mark.
One great way to do this is to have patient-specific reporting capabilities that allow you to compare billings year-over-year. At Mingle Health, we help organizations look at their patient panel year-over-year for codes that are missing or provide an opportunity for increased specificity. When analyzing claims data, we’ve found that many groups are missing 30% or more of the codes from the prior year.
Here are some actionable questions to help you build a system for HCC coding in the future:
- Are you seeing fewer missed codes when you analyze this year compared to last year?
- Do you have gaps for specific conditions, providers, or team members?
- Has your team continued to focus on the importance of HCC coding?
- If not, how can you help them refocus?
The path to improved HCC coding workflows and utilization is a long one. As you look closer at your organization’s current usage and understanding of HCC coding, you will likely find opportunities to improve. For value-based payment programs like PCF, it’s vital to seize these opportunities and make the necessary improvements. You will likely find your efforts rewarded with better payments for patient care, a better understanding of patient health, and increased opportunities to provide more comprehensive care and minimization of future patient health risks.
Take the Next Step
Do you know how HCC coding plays a role in the value-based contracts your organization is participating in? Do you want to understand your coding opportunities?
We’re here to help. Mingle Health will assist you with examining your data for opportunities and charting a path to improve your coding specificity, and therefore receiving recognition for the complexity of patients you care for. You have the potential to significantly improve your payments under programs like Primary Care First. Get in touch today>>
Our Primary Care First success guide for 2022 is available today. In this webinar, Roxane Thacker, VP of Managed Clinical Services here at Mingle Health, provides an overview of what it takes to prepare and be successful in the program in 2022.