The Centers for Medicare & Medicaid Services (CMS) is making wholesale changes to hierarchical condition categories (HCCs) that will significantly impact your coding and billing operations and potentially lower your revenue.
While the changes don’t go into effect until Jan. 1, 2024, now’s the time to review the HCC diagnosis codes in relation to your coding workflows to blunt the effects of any changes. It’s also a good time to ensure you have the right technology in place to handle these changes.
Details of the Changes
Version 24 of the HCC model was initiated in 2020 and features 86 payment HCCs that encompass just under 9,800 ICD-10 diagnosis codes. The new model (version 28), which will be phased in over three years, increases the number of payment HCCs to 115, relying on 7,700 ICD-10 codes. That translates to a 33% increase in HCC categories and a 21% reduction in ICD-10 codes to support them.
In its supporting documentation, CMS detailed its desire to decrease discretionary diagnostic categories based on Principle 10, which strives to reduce coding variations in risk-adjustment models. The agency focused on HCC codes with the highest variations between Medicare Advantage (MA) and fee-for-service (FFS). Categories were renumbered to better align with disease groups and to leave room for further tweaks.
These changes are expected to save Medicare $11 billion in 2024, and the agency acknowledged that the new guidelines could change MA risk scoring to reduce reimbursement. MA plans can gain financially by making it appear that patients are sicker than they are. Federal audits show that eight of the largest MA plans, which represent two-thirds of MA enrollees, have submitted inflated claim information, and four of the largest plans have been sued by the federal government over coding practices.
It’s clear that CMS and other federal agencies responsible for Medicare and Medicaid healthcare payments take claims accuracy seriously. Organizations must examine the workflows and technologies used to generate claims now to ensure compliance once the new HCC diagnosis codes come into effect.
Start Preparations for Upcoming Changes
Coding and audit staff at most organizations already are overworked, and putting another task on their plate may seem like a bridge too far. But HCC v28 represents a fundamental change to coding practices that have been used for years. Taking even small steps now can make the difference between quickly adapting to the new rules and becoming paralyzed, which will negatively affect revenue for months.
1. Evaluate your Staff
Is your staff adequately prepared to deal with wholesale changes to HCC code sets? Do you have the right people in the right positions? Make an honest assessment of your coding and compliance staff. The hiring process can take months — even without historically high labor shortages— so don’t delay if you need to take this step.
2. Educate Staff on the Changes
CMS generally doesn’t publish the final ICD-10 mappings until the latter part of the year, but education can’t wait that long for the coding, billing, and auditing departments. Look for webinars detailing the changes and set alerts for CMS news and training opportunities. The more prepared staff members are, the better job they will do come the Jan. 1, 2024, changeover date. This might be a perfect chance to “train up” coding and audit staff who have proved themselves ready for a new challenge.
3. Examine your Processes
Workflows are critically important to ensure proper day-to-day operations, and a change of this magnitude certainly will bring disruptions and new opportunities. Audit staff will likely want to increase the number of prospective audits they perform to catch errors or anomalies prior to submission. Tweaks in coding and auditing processes may smooth the transition.
4. Contemplate your Technology
Technology can help audit staff perform at the highest levels by compiling and presenting information in a user-friendly way. For example, many organizations use the MEAT (monitoring, evaluation, assessment, treatment) criteria as part of their documentation practices to support HCC and ICD-10-CM diagnosis coding. Does your audit software include MEAT criteria on the audit case detail screen? Other ideal features include a central platform for coding operations, code lookup dictionary, diagnosis code section, and an HCC diagnosis code section with side-by-side reference between versions 24 and 28.
If you discover your current software is lacking, look for vendors with deep expertise in healthcare auditing and the ability to meet the unique needs of your organization.
