Providers Leaving Money on the Table – Proper HCC Coding Eliminates It

May 26, 2017 Phil C. Solomon

The Centers for Medicare and Medicaid Service’s (CMS) Hierarchical Condition Category (HCC) risk adjustment model calculates risk scores, which will adjust capitated payments made for aged and disabled beneficiaries enrolled in Medicare Advantage (MA) and other plans.

The CMS-HCC model design uses two risk segments with separate coefficients to reflect the cost patterns of beneficiaries.  The community model represents those who live in the community less than 90 days as opposed to an institution.  Beneficiaries residing in an institution for 90 days or more fall into the long-term care category, which incurs an additional risk adjustment.  By design, both models predict healthcare costs for beneficiaries.

The CMS-HCC risk adjustment model looks at prospective data to predetermine the cost for the next year.  CMS pays a per-member per-month fee to the payer based on the prospective years’ risk scores.  Providers must identify all chronic conditions and/or severe diagnoses their patients have in a given year to substantiate a “base year” health profile for each patient that predicts costs in the following year.

The Path to Gaining Incremental Revenue

Few providers have the resources and are proficient enough in risk adjustment modeling to mitigate all of the compliance risks that they face.  This creates a problem for providers because there are significant dollars at risk for their enterprises.  In order to reduce risks, providers either hire expert HCC auditors as an internal resource or look to outside firms who are experts at executing risk adjustment and HCC auditing.  Many companies are capable of providing this

In order to reduce risks, providers either hire expert HCC auditors as an internal resource or look to outside firms who are experts at executing risk adjustment and HCC auditing.  Many companies are capable of providing this service however; the best practice approach is to work with a company who can guide provider’s to keep up with CMS’s requirements for compliance while monitoring healthcare outcomes.

It is important to maximize revenue and increase the bottom line.  HCCs are one area that can have an immediate positive financial impact for a provider. I recommend you look into HCC coding auditing to be sure you are being reimbursed accurately.  If you have questions, I can be reached at phil.solomon@miramedgs.com or at 404-849-8065.

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog and serves as the Vice President of Marketing Strategy for MiraMed, a healthcare revenue cycle outsourcing company.  As an executive leader, he is responsible for creating and executing sales and marketing strategies which drive new business development and client engagement. Phil has over 25 years’ experience consulting on a broad range of healthcare initiatives for clinical and revenue cycle performance improvement.  He has worked with industry’s largest health systems developing executable strategies for revenue enhancement, expense reduction, and clinical transformation. He can be reached at philcsolomon@gmail.com

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