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

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

3. 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

4. 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

5. 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

6. 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.

7. 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

8. 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

9. 100 % When? PIP-DCG = Primary Inpatient Diagnostic Cost Group
CMS-HCC = CMS Hierarchical Condition Categories

10. 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)

11. How much does it matter? HCC Annual Reimbursement
HCC Diabetes with no complications $ 485
HCC x D. w/ ophthalmic manifestations $ 831
HCC X –3X D. w/ acute complications $ 948
HCC x D. w neurologic manifestations $1,338
HCC x 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”

12. Top Ten HCCs by Frequency (from Medicare FFS Data)
HCC COPD %
HCC CHF %
HCC Diabetes without complications %
HCC Vascular disease %
HCC Specified heart arrhythmias %
HCC Breast, Prostate, Colorectal and other Cancer Tumors %
HCC Angina %
HCC Ischemic or unspecified stroke %
HCC Rheumatoid arthritis & infl. conn… %
HCC Ischemic heart disease %

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

14. 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)

15. 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

16. 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:
Conversely there are many instances where more than one code is required to fully describe a patient’s condition

17. 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 for the manifestation of dementia.

18. 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

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

20. 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

21. 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”

22. 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)

23. Remember
If it’s not documented,
then …

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

25. 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

26. 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.

27. 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.

28. 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.

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

30. WHERE ARE YOU
ON THE HUNT?

31. ARE YOU ON
TRACK?

32. Questions

33. 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