CMS Risk Adjustment Payment Methodology Presented by: The ICE RADAR Team 2004

The Hunt for HCCs (Hierarchical Condition Categories) Suggested Title….went over well at the CAPG Seminar.

Background Change in Payment Methodology – mandated by “BBA” CMS determined healthier patients were choosing HMOs CMS selected a “Risk Model” based on chronic additive conditions Accurate diagnosis documentation and reporting now determines reimbursement

Background (cont’d) Previous reimbursement methodology was based solely on demographic information (age, sex, Medicaid status, county of residence, etc.) CMS believes risk adjustment pays more accurately based on predicted health costs by adjusting payments based on health status as well as demographics Payments are higher for less healthy members and lower for more healthy members Health status is re-determined every year In other words your reimbursement is based on past diagnosis …… % changes annually until 100% risk adjustment

Risk Adjustment Models 2000 – 2003 PIP DCG (Principal In-Patient Diagnostic Cost Group) Model determined a portion of the per member payment from CMS 2004 CMS-HCC (Hierarchical Condition Category) Model determines a portion of the per member payment 30% risk adjustment and 70% demographic data PIP DCG based solely on primary diagnosis on the hospital inpatient encounter. HCC is additive chronic diagnosis model. Need graph from Debbie

Data Sources? Inpatient data Hospital Outpatient data Face-to-face Physician/PA/NP visit data (Exception pathologists & radiologists aren’t required to see patients to perform their services) Exclusions: SNF, Hospice, and ICF Lab, Radiology, Ambulance, DME, Prosthetics, Orthotics, and ASCs Members flagged as Hospice Since independently billing physicians (not employed by the nursing home) visit patients in nursing homes, the medical record documentation for a beneficiary HCC may come from a nursing home only if the beneficiary is identified in the MDS (Minimum Data Set) as a long term institutional resident and the physician visit is face-to-face. Intermediate Care Facility Ambulatory Surgery Center End Stage Starting payment year 2006 diagnostic radiology readings will not be included in risk adjustment model.

Risk Adjustment Model (cont’d) CMS-HCC 70 disease categories (chronic) 3,100 diagnoses “Predictive Model” 2004 payment based on CY2003 encounter data If no encounter data submitted in 2004 = minimum payment for that member in 2005

What’s the Big Deal? Risk Adjusted portion of the premium is increasing to 100% Physician data = 80% of the data submitted Physician diagnosis coding will determine the amount CMS pays per member Whole pot of money stays the same Is your documentation sufficient to fund the care for your sicker patients? Physician payments will be affected by the portion of the pot to the health plan / MG / IPA The quality of diagnosis coding and supporting documentation must improve in order to maintain the same $ CMS expects payment to be budget neutral

100 % When? PIP-DCG = Primary Inpatient Diagnostic Cost Group CMS-HCC = CMS Hierarchical Condition Categories

It All Begins with You ! Goal = Properly Reflect the Member’s Health Status Fully assess ALL Chronic Conditions …at least annually Thoroughly Document in the Chart ALL conditions evaluated each visit Code to the Highest Level of Specificity (fully utilize the ICD-9 Diagnosis Coding System)

How much does it matter? HCC Annual Reimbursement HCC19 250.00 Diabetes with no complications $ 485 HCC18 250.5x D. w/ ophthalmic manifestations $ 831 HCC17 250.1X –3X D. w/ acute complications $ 948 HCC16 250.6x D. w neurologic manifestations $1,338 HCC15 250.4x D. w/ renal or peripheral circulatory manifestations $1,852 Note: Some categories have a hierarchy, such as Diabetes, in such categories, only the highest HCC would “count”

Top Ten HCCs by Frequency (from Medicare FFS Data) HCC108 - COPD 12.17% HCC80 - CHF 11.17% HCC19 - Diabetes without complications 10.79% HCC105 - Vascular disease 9.36% HCC92 - Specified heart arrhythmias 8.93% HCC10 - Breast, Prostate, Colorectal and other Cancer Tumors 6.99% HCC83 - Angina 5.04% HCC96 - Ischemic or unspecified stroke 3.97% HCC38 - Rheumatoid arthritis & infl. conn… 3.85% HCC82 - Ischemic heart disease 3.82%

“Close, but No Cigar !” Does NOT Risk Adjust: Does Risk Adjust: ~401.0 Hypertension benign ~ 414.00 Coronary athersclerosis ~ 449.9 Atherosclerosis unspecified ~ 427.89 Other specified cardiac dysrhythmia,other Does Risk Adjust: ~ 402.00 Hypertensive Heart DX-Malignant w/o heart failure ~ 413.9 Angina pectoris unspecified ~ 430.3 Atherosclerosis of by-pass graft of extremities ~ 427.3 Atrial fibrillation

How can you help? Physician is responsible for ensuring that coding adheres to ethical standards Physician Office Staff (coders) should understand the fundamentals of ICD-9 coding Code exactly as you/they would for FFS except use all applicable codes Update codes every year in October (codes are time sensitive, based on dates of service)

How can you help? (cont’d) Coding for physician office is different that the rule for inpatient hospital stays: Physicians must not code “probable,” “suspected,” “questionable,” “rule out,” or “working” diagnoses. Rather, code the conditions to the highest degree of certainty for that visit, such as symptoms, signs, abnormal test results, or other reasons for the visit. Later when the certainty of the condition is known, then it can be documented in the medical record, dated, and coded for reporting. (Note: Doctors can document rule out, they just can’t code it.) Use NOS or NEC type diagnosis as they don’t count

Coding Tips ICD-9-CM guidelines may require combining two or more conditions into one code Only use a combination code if … it fully describes the patient’s condition Hypertensive heart disease with congestive heart failure requires only one code: 402.91 Conversely there are many instances where more than one code is required to fully describe a patient’s condition

Coding Tips (cont’d) When the terms “code also,” “code first,” or “use additional code” are included in the ICD-9-CM manual for a particular code, follow the instructions to fully code the patient’s condition. For example: Dementia in multiple sclerosis requires two codes: 340 for the underlying multiple sclerosis, and 294.10 for the manifestation of dementia.

What else? Use only standard abbreviations and keep them to a minimum. Each physician office should have a standard abbreviation list. (LBP can mean Low Blood Pressure or Low Back Pain) Each page of the chart must identify the patient by name, or patient ID number

Most Important Coding Tip: “If its not documented, then … it didn’t happen!”

Documentation Tips: Clear, Concise, Consistent, Complete, and Legible SOAP Approach: Subjective, Objective, Assessment, Plan Problem List Approach: a numbered and dated index of patient’s problems kept in front of medical record, from identification through resolution

Documentation Basics: Reason for Visit: This is the chief complaint of the patient: “weakness, headache, and liver cancer” Care Rendered: This is what was done to address the chief complaint. “examination and blood work” Conclusion and Diagnosis: This is the outcome of the findings based on the care rendered. “Anemia with coexisting conditions of Adult onset diabetes, neuropathy, COPD, and Asthma”

What to code?? Complete Diagnostic Coding, not just primary Diagnosis Providers must report all diagnoses that impact the patient’s evaluation, care, and treatment including: Main reason for visit Co-existing acute conditions Chronic conditions (such as Atrial fibrillation, CHF, Chronic Renal Failure, Rheumatoid arthritis, Crohn’s disease, Diabetes, COPD/ Asthma, & Cardiomyopathy) Pertinent past conditions E-codes (external causes of injury and poisoning) V-codes (factors that influence health)

Remember If it’s not documented, then …

Remember …it didn’t happen ! CMS audits medical records to validate documentation.

CMS Validation Audits: Superbills are not considered sufficient documentation … they are a reporting format only. Documentation must show the diagnosis was assigned within the data collection period. Data discrepancies that are found as a result of audit may cause a risk adjusted payment to be changed

About the Coder Only authorized medical staff may document the patient record The person who documents the record must be identified Medical record documentation must be authenticated by the writer’s signature. The signatures should be identified at least once per entry in the record by printed and legible name, credentials, and date.

Responsibility When billing services are used, the physician is still responsible for the accuracy and completeness of the data. Medicare+Choice (Medicare Advantage) health plans must attest to CMS that data they are providing accurately reflects each patient’s visit and can be supported by the medical record. Health plans may, therefore, also conduct audits.

Potential Next Steps Training Where: Department, MD Site meetings - Target Diabetes Training- Develop Tools Cardiology correct coding Review charge documents for FP, IM, & Cardiology Where: Department, MD Site meetings Distribute coding tools with risk adjusted diagnoses clearly identified Reprint charge tickets/ superbills with risk adjusted diagnoses in BOLD FONT Review charge document/superbills in specialties such as family practice, internal medicine and cardiology. Make sure risk adjustment codes are on these documents.

Resource Guides Resource Guides are available at Iceforhealth.org Coding example handouts CMS Physician Training CD

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Questions

IPA / MG Action Items Don’t use home grown codes Sub-capitated arrangements need to have standard E&M codes Contract case rates Global arrangements