Risk adjustment and hierarchical condition category (HCC) is a value-based payment model created to estimate future costs for a patient. Through proper coding procedures (considering new rules for coding), it identifies serious or chronic illnesses among patients and assigns a risk adjustment factor (RAF) score based on the person’s health conditions and demographic information.
The average HCC score is 1.0. Healthy patients have scores below that, while sicker patients have numbers above.
An HCC RAF score measures how costly a patient is predicted to be in the current year–that is, whether they are likely to be more or less costly to treat than the average population. It uses an individual’s demographics and diagnoses to identify a risk score, including age, sex, residence in a health institution, and any ailments assigned in in-patient, out-patient, and office-based settings.
This score is taken from claims and medical records collected from doctors’ offices, in-patient hospital visits, and outpatient clinics. The diagnosis factors that contribute to a patient’s RAF score include:
An HCC RAF score is a way to adjust payments, compensating health plans and providers for treating sicker patients and reducing their incentives to select healthier, less costly patients.
The goal of risk adjustment is to reimburse for health care interventions and reduce barriers to treating patients with complicated conditions. HCC RAF scores are important because they affect overall payments.
An HCC RAF score is determined through HCC coding. HCCs are diseases or conditions organized into body systems or comparable diseases that have been assigned a value that correlates with an increased cost of care.
These are placed into eighty-six categories, each placed into a hierarchy of risk and used to determine a contribution to the RAF calculation. The top HCC categories include:
Codes are submitted on health claims and are mapped to determine overall value as HCCs are cumulative. The higher the RAF score, the greater the disease burden. The lower the RAF score, the healthier the patient.
The average HCC RAF score is 1.0. This indicates a patient who is predicted to use a regular amount of resources.
Decimal places represent above or below average. A score above 1.0 exhibits high risk. These are typically complicated patients who are likely to consume a large amount of resources and need to be given more complex care. Conversely, patients with scores below 1.0 are low-risk and will therefore cost less.
HCC RAF scores are highly dependent on the complete reporting of patient information and proper HCC coding. Without these two key elements, RAF scores may be inaccurate, leading to wrong reimbursements and costing healthcare providers millions in lost funds.
Infersciene’s HCC assistant is a platform that uses advanced Natural Language Processing (NLP) to analyze data in the patient’s chart in a way that no diagnoses are overlooked. It effectively displays accurate HCC code suggestions in real time for maximized reimbursement. Contact us to find out how our HCC assistant can work for you, or request a demo today!
References:
https://reportingmd.com/hccs-risk-adjustment-factor-raf-scores-and-reportingmd/
https://www.aafp.org/pubs/fpm/issues/2018/0300/p5.html
