What Are the Objectives of HCC Coding?

Whether you’re a physician or the owner of a medical facility that treats high-risk patients, it’s important to familiarize yourself with hierarchical condition category (HCC) coding because it has a direct impact on the reimbursements you receive from medical insurance companies and healthcare plans.

As such, you must adopt efficient HCC coding practices and ensure that the diagnosis codes you present to Medicare and other medical insurance programs when submitting your payment claims are correct.

Fortunately, there are technology solutions available that can help you code efficiently and prevent coding errors that could delay payments.


What Is HCC Coding?

HCC coding is a risk adjustment methodology used in the healthcare industry to estimate future costs of needed healthcare services. This model was developed by the Center for Medicare Services (CMS) in 2004 and rapidly became the standard for risk adjustment because the industry is now shifting to value-based reimbursement models.

Medicare and other insurance programs use codes submitted by healthcare providers when reviewing reimbursement requests. Special numbers, commonly referred to as ‘risk scores,’ are assigned to patients.

These scores help insurance programs determine the future costs of treating these patients. They also use the scores to determine the amount of the payments that need to be made to beneficiaries and healthcare providers. Therefore, HCC coding is a key element in the risk adjustment process that Medicare and other programs will use to make critical decisions regarding payments and healthcare resource needs and utilization.


Purpose of HCC Coding

HCC coding relies on the ICD-10-CM codes provided by healthcare providers. These codes are the standardized cataloging system that every provider should use to submit their payment claims and apply to different healthcare settings. Each code represents a specific condition, related problems, symptoms, abnormal findings, and other social circumstances of a disease or condition.

HCC coding paints a picture of the condition of each patient and is a way for healthcare providers to communicate the complexities of their medical conditions. It also makes it easy for healthcare providers to accurately predict future healthcare resources that will be needed as part of the patient’s treatment plan. 

Healthcare providers are also often encouraged to evaluate their patients’ records and discover possible health determinants that can help them predict outcomes that are likely to change the value of their services.


More About Risk Adjustments

The risk adjustment factor plays an important role in defining cost metrics. Proper documentation of the diagnosis is important when implementing HCC coding because the information you provide will be used to determine your patients’ health risks and assignment of payment rates.

Erroneous HCC coding will result in inaccurate diagnosis codes for your patients, resulting in incorrect treatment. Inaccurate documentation will also lead to inaccurate payment rates for you.


The Need to Get Coding Right

Through accurate HCC coding, you can easily account for the differences in your patients’ complexities, which results in improved quality of services delivered and measurement of cost performance. Patients under the Medicare Advantage programs often require intensive medical care. Healthcare service providers who handle these high-risk patients expect to be reimbursed appropriately for their services.

In other words, their payment rates are higher than those of providers dealing with low-risk patients. So, if you fail to document the severity of your patients, you won’t receive the correct reimbursement for the applicable patient population. This is why you need to implement reliable and effective technologies as part of your HCC coding practices. 

Thankfully, Inferscience has the right solutions for you. Our software enables you to analyze your patient’s data from the electronic health record and other external sources so that you enter accurate HCC codes that will guarantee you get paid quickly and accurately!






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