1. Risk Adjustment Hierarchical Condition Categories (HCC Coding)
Payment Model
General Education Guide

2. What is CMS’s Hierarchical Condition Categories?
Medicare Risk Adjustment payment model introduced by the Centers for Medicare and Medicaid (CMS) in 2004.
The goal is to pay Medicare Advantage (MA) and Prescription Drug Plans (PDPs) accurately and fairly by adjusting payment for Enrollees based on their demographics and their health status.
This Risk Adjustment payment model measures the disease burden that includes 70 HCC categories, which are correlated to diagnosis codes.
Accurate diagnosis code documentation (ICD-10 CM) and reporting now determines reimbursement.
8,700 ICD-10 codes map to 1 of 70 HCCs (mostly chronic but some are acute). Previously in ICD-9 it was 3,600 codes.

3. The Process Care is Delivered to the Member (face-to-face encounter)
Care and Diagnoses are Documented in the Chart / Progress Notes
ICD-10 CM codes are submitted on Claims based on the face-to-face encounter clinical findings
Plan & Providers can Deliver better care
And reimbursement is received
Claims data diagnosis codes are converted to HCC codes
CMS Calculates MA Risk Adjustment
HCC codes data is submitted to CMS

4. Payment Methodology
Payments are based upon acuity of diagnosis. • Sicker patients will require more health care resources. • Diagnoses must be reestablished each year to ensure that next year’s payments will cover costs. For example, an amputation must be reported at least once per year to ensure that services related to this condition will be covered. • Documentation must support the diagnoses that are reported AND A PLAN FOR EACH DIAGNOSIS. Often times physicians get familiar with patients over time and neglect documentation of chronic stable conditions.

5. Questions to consider regarding physician documentation
The medical record can be compared to a story book of the patient
Does the documentation paint the complete picture of the patient’s condition?

6. Document, Document, Document
Is your documentation sufficient to fund the care for your sicker patients?
Goal = Properly Reflect the Member’s Health Status
Fully assess ALL Chronic Conditions ….…at least annually
Thoroughly Document in the Chart (Progress Notes) ALL conditions evaluated for each visit
Code to the Highest Level of Certainty (fully utilize the ICD-10 Diagnosis Coding System)

7. HCC Payment Methodology and ICD-10 Coding
Physicians will need to be more specific in their documentation than they may have been in the past. There is a greater number of codes in ICD-10 versus ICD-9.
Physicians will need to pay more attention to their medical documentation, to make sure that it contains the necessary details so that staff members can choose the right codes for each patient.
Besides the increased specificity of a diagnostic code, doctors also face other documentation challenges, including identification of:
Conditions that contributes to the complexity of a disease
The severity of a contributing comorbidity
The current stage of a disease (such as chronic kidney disease, dementia, or asthma)
The type of diabetes and its severity
A complete history of any present illnesses and follow-up visits

8. Coding Changes with ICD-10
Diabetes documentation must include:
Type of diabetes
Body system affected
Complication or manifestation
If a patient with type 2 diabetes is using insulin, a secondary code for long term insulin use is required
Neoplasms documentation must include:
Type: Malignant (Primary, Secondary, Ca in situ) Benign Uncertain Unspecified behavior
Location(s) (site specific)
If malignant, any secondary sites should also be determined
Laterality, in some cases
Asthma documentation must include:
Severity of disease:
Mild intermittent
Mild persistent
Moderate persistent

9. Coding Changes with ICD-10 Diabetes
There are over 200 ICD-10 codes for diabetes. Medical record documentation must be more specific regarding the disease in order to choose the most appropriate code. Providers MUST create a link between diabetes and its complications. There are also some new categories of DM complications in ICD-10: DM with skin complications, DM with oral complications, and DM with arthropathy.
Providers will be required to draw a causal link between the type of diabetes and the complications. Under ICD-10, more than ever, clear and concise documentation will be critical to ensure correct coding and to receive appropriate reimbursement for your risk population.

10. Examples of Diabetes in ICD-10
KIDNEY DISEASE
E10.22
Type 1 Diabetes with kidney complications
E11.22
Type 2 Diabetes with kidney complications
( Use additional codes listed below to identify complication)
I12.9
Nephropathy w/HTN and CKD (Stages I-IV)
I12.0
Nephropathy w/HTN and CKD (Stages V-VI)
N08
Glomerular disorders in diseases classified elsewhere
N04.9
Nephrotic syndrome with unspecified morphologic changes
N03.8
Chronic nephritic syndrome with other morphologic changes
N18.1
Chronic kidney disease (CKD), stage I
N18.2
CKD, stage II (mild)
N18.3
CKD, stage III (moderate)
N18.4
CKD, stage IV(severe)
N18.5
CKD, stage V
End stage kidney disease (ESRD)
N18.0
Chronic kidney disease, unspecified
Z99.2
Dependence on renal dialysis
Z79.4
Insulin use

11. HCC Coding Impact to Revenue
CMS Revenue paid to Health Plan
All conditions coded appropriately: $2,624
No conditions coded: $528
All conditions coded appropriately – High level of specificity
Some conditions coded – Moderate level of specificity
Minimal conditions coded – Low level of specificity
76 year old female
0.437
Medicaid eligible
(aged female 65+)
0.151
Diabetes w/ vascular complications
E11.59 (HCC 18)
0.368
E11.9 (HCC 19)
0.118
No diabetes coded X
Vascular disease w/ complications Atherosclerosis, L-extr. w/ ulcers I (HCC 106)
1.413
Vascular disease w/o complications
PVD I73.9 (HCC 108)
0.299
No vascular disease coded
CHF I50.9 (HCC 85)
CHF not coded
Disease Interaction
(DM + CHF)
0.182
No Disease Interaction
Total RAF
2.919
1.005
0.588
CONFIDENTIAL – DO NOT DISTRIBUTE

12. Chart Documentation Each patient encounter should include:
•Reason for the encounter with relevant history
•Examination findings
•Diagnostic test results
•Assessments
•Clinical impressions
•Plan of care

13. Treating, Managing or Assessing the Chronic Conditions
In order for CMS to make the payment to the health plan the diagnoses submitted must be from a face-to-face visit and the visit must indicate how the chronic conditions are being treated, managed or assessed
Sample language
Assessment Plan
Stable Monitor
Improved D/C meds
Tolerating meds Continue meds
Deteriorating Refer
Example: Hypertensive CKD III, stable well controlled, continue meds
Example: COPD, stable on Advair
Reference: CMS-Centers for Medicare & Medicaid Services, "2008 Risk Adjustment Data Technical Assistance For Medicare Advantage Organizations Participant Guide." Leading Through Change, Inc Centers for Medicare & Medicaid Services, (1995) documentation guidelines for evaluation & man

14. Physician Signatures
Medical records will be reviewed if there is dated medical record documentation (e.g., handwritten or transcribed consultation report, discharge summary) with a physician signature and credentials. A medical record that lacks a date or physician signature and credentials is invalid and will not be reviewed. Hand-written signature or initials, including credentials Mary C. Smith, MD; or MCS, MD If electronic signatures are used as a form of authentication, the system must authenticate the signature at the end of each note. Some examples of acceptable electronic signatures are: “Electronically signed by,” “Authenticated by,” “Approved by,” “Completed by,” “Finalized by,” or “Validated by,” and include the practitioner’s name and credentials and the date signed. Electronic signature, including credentials Must be password protected and used exclusively by the individual physician

15. Top 10 issues with documentation
Top 10 fails in documentation:
1. Failing to capture HCCs at least once every 12 months.
2. Failure to ensure the medical record contains a legible signature with credential.
For example, determine whether such as the electronic health record was unauthenticated (not electronically signed).
3. Failure to ensure the diagnosis codes being billed and the actual medical record documentation match.
4. Failure to document according to the M.E.A.T. principles. Diagnoses need to be monitored, evaluated, assessed/addressed, and treated.
5. Failing to annually document status Z codes and chronic conditions.
6. Failing to use a linking statement or document a causal relationship for manifestation codes.
7. Failing to add any diagnosed HCCs or RxHCCs (prescription drug HCCs) to both the chronic problem list and the acute assessment.
8. Failing to evaluate each of the HCCs/RxHCCs on a semiannual basis for updates.
9. Failing to review all specialist documentation related to cardiology, master discharge summaries, radiology, specialty correspondence, pulmonary, echocardiograms, and x-rays, laboratory results, and previous encounters.
10. Failing to submit more than the standard four ICD-9-CM codes.

16. Annual Wellness Visit Medicare Annual Wellness Visit Requirements
Medication Review 
Allergies or NKDA listed
 Vital Signs (Include BMI)
 Physical Examination/ Assessment and Treatment Plan for Members Medical Conditions 
Referrals needed for Preventive Health Review (Colon Cancer, Labs, and Bone Density) 
Discussion regarding Advance Directive or End of Life documented in the progress note
Preventive Health Review
Preventive Health Counseling on the following
Improving and Maintaining Physical Activity
Bladder control issues
Fall risks and fall prevention
Improving and maintaining physical health
Improving and maintaining mental health
Pain scale (0-10)
Functional Assessment that addresses
Continence
Mobility/Transferring
Feeding
Bathing
Dressing
Toilet Use
Psychological Assessment (PHQ-9)
Cognitive Assessment (6CIT)
Colon Cancer Screening
Breast Cancer Screening
Diabetic Patients
Hba1c Test
Diabetic Retinal Exam
Attention Nephropathy
Diabetic Foot Exam
Rheumatoid Arthritis patients Medication Management (Age 18+)
Osteoporosis Management (women 65+) Bone Density test, medication
Influenza vaccine
CPT code
Coding Requirements
Initial Assessment G0438 Established Assessment G0439
FQHC Initial Assessment G0468
FQHC Established patient G0467

17. Annual Wellness Visit Forms

18. Audits CMS audits medical records to validate documentation.
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.

19. We welcome your feedback and appreciate your cooperation.
Contact Information
Please remember, “Documentation is only good if the next physician who treats the patient can pick up your record and know exactly what happened”
Please call or us at anytime for questions or for assistance
Jessica Rivas (818) ext. 430
Linda Deaktor (818) ext. 236
Kimberley Litzsey (818) ext. 303
We welcome your feedback and appreciate your cooperation.