Medicare Advantage and HCC Risk Adjustment

The Medicare Advantage Program, since its inception in 2003, has grown in popularity and has played a crucial role in the delivery of Medicare and reimbursement services to beneficiaries. While various risk assessment models are available in the health sector for risk adjustment assessment, the Medicare Advantage Program maintains the use of the hierarchical condition categories (HCC) coding-based model for the assessment of risk adjustment factor scores in the prediction of healthcare costs for patients.

The HCC model of risk adjustment factor score was introduced in 2004 by the Centers for Medicare & Medicaid Services (CMS) to more accurately estimate health care expenses for each patient and boost the precision of risk adjustment data for reimbursement requests.

The HCC model is based on the set of codes mapped out by ICD-10. The diagnoses, symptoms, and other information clinicians and other healthcare providers use to label and bill for medical services are classified using the ICD-10 coding system. To determine the risk adjustment score of a patient, CMS matches an ICD-10 code to precisely one HCC. Insurance companies calculate risk-adjustment factors (RAF) for patients with HCC scores and sociodemographic characteristics, including age and gender.

Understanding the basics of HCC coding and its importance to the determination of the risk adjustment factor score has led many healthcare organizations to the realization of the need for medical coders in the team that are knowledgeable in HCC coding and risk adjustment coding. There is a need for consistent, accurate, and thorough coding of medical conditions, especially those of HCC value, like chronic conditions. It is a significant determinant of healthcare outcomes, costs, and reimbursements. Accurate coding of medical conditions is also important because of the shift of the healthcare system towards value-based care. There is also a need for physicians to understand the impact of HCC coding on reimbursement for better documentation.

Efficient documentation is of paramount importance to the increment of risk adjustment factor scores and the reimbursement of medical services for beneficiaries. The onus of effective documentation lies on the team as a whole and not just the physicians, as there is a need for a collaborative workflow in healthcare services. As a result, a dedicated workgroup should be responsible for improving documentation. The workgroup must ensure medical documentations effectively depict the patient’s medical needs and diagnoses to prevail in value-based contracts. Establishing a good health profile for optimal reimbursement involves the provision of documentation that indicates the management, evaluation, assessment, and treatment plans (M.E.A.T) of the medical conditions.

A precise RAF score will improve government financing, but to obtain better scores, providers must first have all the necessary tools and information for proper documentation. There is a need in the industry for software tools to support doctors’ efforts to improve HCC documentation and reduce the time that would take, as documentation can often be too overwhelming and time-consuming. Such software is Inferscience’s HCC coding application, which is designed to relieve physicians, coders, and other members of the healthcare team of their burden by optimizing HCC coding risk adjustment documentation.

Inferscience’s HCC assistant is a cloud-based software for smart HCC coding, billing, and documentation with full EHRs integrations. This software is essential for optimal RAF score and reimbursement as it provides real-time analysis performed on patient data giving the practitioner prompt advice on HCC coding and reducing hours spent looking up and documenting.

Inferscience also provides robust reporting, which involves keeping tabs on the healthcare providers who use the tool and allows tracking of utilization of the tool. It also fosters communication between organization leaders and provider teams to work together to improve the organization’s HCC risk adjustment processes.

Also, there is a need for the comparison of yearly RAF scores to see their impact on healthcare organizations’ reimbursement and funding and also to draw informed conclusions on how to improve the RAF score going forward.

There is a need for getting your entire team, from physicians to financial workers, to work together in improving patient care, RAF score, and effective reimbursement requests.


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