Maximizing Your HCC Coding Scores

Many Medicare Advantage plans, as well as physician groups serving the Medicare population, are missing opportunities to aid their members and maximize their revenue potential because of incorrect or incomplete Hierarchical Condition Category (HCC) coding. This is a frightening reality because without the right data – and without reporting it in the proper way – not only do health plans and providers lose money for which they are rightfully entitled, but seniors often fail to get the care they need, in the right setting and at the right time.

Since 2004, the Centers for Medicare and Medicaid (CMS) has used the HCC model to calculate payments to Medicare Advantage providers and health plans. The model measures the “disease burden” of enrollees by correlating certain diagnosis codes to more than 70 chronic clinical categories such as diabetes, heart conditions and pulmonary disease. This information is used to establish payment to a Medicare Advantage plan based on that plan’s predicted expenditures to serve those members. In an era of accelerating medical costs and flat payments from CMS, accurately reflecting the health status of individuals through proper HCC coding is one of the best ways for Medicare Advantage plans and physicians serving this population to remain financially viable.

Ensuring Accurate Data Reporting

There are a variety of things that can be done that will greatly increase the likelihood of having accurate and complete HCC data reporting. For example, most medical groups or IPAs are sending data electronically to their contracted health plans. If you are using an EDI vendor, it is important to make certain you receive timely reports on rejected items, so you can respond appropriately. It is also important to fully understand the maximum amount of diagnosis codes your EDI vendor is capable of capturing and transmitting to contracted health plans. Finding out this basic information may allow you to locate diagnostic codes that would otherwise be lost . and doing so will have a positive effect on your revenue.

Similarly, it is critical to keep your eye on both new members as well as terminated members, as both can impact your revenue potential. Find out if new members to your group already have assigned HCCs from their prior health plan and, if appropriate, make sure you assess and document those conditions and maintain them going forward from the standpoint of continuity, consistency and clarity. At the same time, revenue can be re-captured for terminated members that may have initially appeared on your monthly eligibility reports but no longer appear there because their eligibility has ended. The right software programs have a filter option that can quickly provide you with this important information.

Another way to increase your HCC scores is by monitoring each member’s HCCs for consistency in reporting. Keep a special eye on members whose HCCs may be dropping or where it just doesn’t seem to make sense – a chart of an 80-year-old showing no chronic conditions should send up a signal. Remember that each year CMS expects members’ conditions to be assessed and documented and that CMS reimburses not because a member has a chronic condition but because there is evidence (i.e., medical record documentation) that resources were expended in the treatment of that condition.

There are a handful of other simple things you can do as well. For example:

  • Educate yourself regarding the number of diagnosis codes your claim system is capable of storing. Don’t let data get lost simply because your system doesn’t have a place to hold it.
  • Ask your claims department if non-payable claims are processed the same as payable claims. If you are close to a CMS sweep, talk to your claims department to make sure there is no backlog of unprocessed encounter data, which could have detrimental effects on your revenue.
  • Get the latest code books each year so you know you are using the most up-to-date codes. The cost of a code book is minimal compared to the financial benefits.
  • Use chart reviews as a great opportunity to create educational materials, including training guides or even one-on-one training with physicians.

The accurate capture and documentation of information in a clear, consistent and timely manner is vital to both you and your patients. Health plans and providers win through healthier patients and through the increased revenue they receive from eliminating gaps in care that have often left good money on the table. And patients win because they know their healthcare needs are being recognized and attended to in a way that assures they get the care and responsiveness they need. Focusing on the continuity of care in a consistent and proactive manner will result in maximizing your HCC scores and helps make all of this a reality.

Pam Klugman is vice president and chief operating officer of Clear Vision Information Systems, which offers its “Ten Tips to Top HCC Scores” free of charge at

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