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Risk Adjustment, HCC Model, & Stars Ra8ngs 101 An Overview for Coders
& Providers
Risk Adjustment (RA) Risk Adjustment is a method of analysis using diagnoses for financial forecas8ng that has been growing in popularity in healthcare
Medicaid plans began using Risk Adjustment modeling in 1996 and has con8nued to update that model
Medicare Advantage Plans have been using the HCC/ Risk Adjustment model since 2004 and is expanding the program
Commercial Plans are now looking at Risk Adjustment as a valuable method to iden8fy and plan for high risk pa8ents
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RA & Affordable Care Act The Affordable Care Act calls for a risk adjustment program that aims to eliminate incen8ves for health insurance plans to avoid people with pre-exis8ng condi8ons or those who are in poor health. Risk adjustment ensures that health insurance plans have addi8onal money to provide services to the people who need them most by providing more funds to plans that provide care to people that are likely to have high health costs. Insurance plans then compete on the basis of quality and service, and not on the basis of whether they can aUract healthy people (Larsen, 2011)
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Different Programs, Same Goal Whether Risk Adjustment is being u8lized for Medicaid, Medicare, or Commercial pa8ents, the main ingredients used are Diagnosis Codes (ICD codes)
Diagnoses are collected and their specificity drives risk score or categoriza8on
The worse, or more serious a condi8on, or diagnosis, the higher the risk scoring
Risk Scores either affect incoming payment or the future financial forecas8ng for each pa8ent
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Why It MaUers For Medicare Advantage Plans
Risk Adjustment (RA) iden8fies pa8ents who may need disease management interven8ons and
RA establishes the financial allotment allowed from CMS toward the annual care of each pa8ent; with more dollars allocated for those with higher risk scores
For Medicaid and Commercial Plans Risk Adjustment (RA) iden8fies pa8ents who may need
disease management interven8ons and RA establishes the overall state of the popula8on by
aggrega8ng diagnoses; which assists in financial forecas8ng for future medical need
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General RA Guidelines These programs operate on similar rules and guidelines to include: Specific diagnoses must be documented in a face-to-face visit by the trea8ng licensed provider (showing creden8als: MD, DO, PA, NP, OT, CRNA, MSW, and similar
masters level providers) and the documenta8on must be signed by the trea8ng provider to be accepted
Diagnoses must be clearly stated on the DOS (Date Of Service) as a current problem if audited
Diagnoses must be documented each year, ongoing as each year is evaluated without historical context influence
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Significance to Providers Providers have long aUempted to establish the seriousness and severity of the pa8ents they treat through the use of E&M CPT codes
Higher level E&M codes iden8fy serious encounters, u8lizing more medical decision making, and are reimbursed at a higher rate
In Risk Adjustment scenarios, these CPT codes have no significance
Instead, specific diagnosis codes communicate the seriousness of medical decision making
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Significance to Providers Using specific ICD Diagnosis Codes will help convey the true seriousness of the condi8ons being addressed in each visit
Documen8ng these carefully involves two main focal points: Iden8fying the Diagnosis as a current or ongoing
problem as opposed to a PMH (Past Medical History) or previous condi8on
Choosing the most specific Diagnosis Code while also being sure documenta8on supports it
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Origins of Medicare Advantage & the HCC Model
Sub8tle A of the Balanced Budget Act of 1997 created Medicare Choice for pa8ents. This allowed pa8ents to choose the original Medicare FFS program or a Medicare + Choice program.
The Medicare Moderniza8on Act of 2003 changed Medicare + Choice to Medicare Advantage
The new Medicare risk adjustment model was gradually phased into Medicare advantage payment calcula8ons star8ng in 2004 (with full implementa8on in 1/2007)
Developed by researchers at RTI Interna8onal, Boston University and Harvard medical school, Hierarchical Condi8on Categories, uses ambulatory and inpa8ent diagnosis to create a valid risk adjustment methodology to help predict individual expenditure varia8on among Medicare pa8ents
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The HCC Model is Ever-Changing
The original DCG/HCC model in 2000 iden8fied 804 costly diagnosis groups, mapped to 189 HCC codes
Created a repor8ng model for reimbursement based on ICD codes within families of condi8ons. (Hierarchal Categories)
There are 2,944 ICD codes carrying Part C HCC value. The program began with over 3,000 in 2004
There are 1,475 ICD codes carrying Part D HCC value. The program began with over 3,000 in 2004
978 ICD codes carry both Part C and Part D HCC value. The program began with ~ 1500 in 2004
Major Changes are due for 2014 (new HCCs, split values, etc.) 3/17/13 ionHealthcare, LLC All rights reserved. For educa8on & discussion purposes. PermiUed use via contractual agreement/purchase. 10
How ICD Codes Carry Value
Most of the ICD diagnosis codes which are in the model are chronic condi8ons
Risk Adjustment is based on adjus8ng the es8mated risk of each pa8ent based on known diagnoses
Part C HCC (HCC-C) are those diagnoses which are costly to manage from a medical perspec8ve
Part D HCC (HCC-D) are those diagnoses which are costly to manage from a prescrip8on drug perspec8ve
Some diagnoses carry both part D and Part D value These ICD codes have a RAF (risk adjustment factor), similar
in concept to the RVU value of procedure codes
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HCC Hierarchal Categories Used
2014 Hierarchal Categories in the HCC Model
INFECTION
BLOOD CEREBROVASCULAR DISEASE
COMPLICATIONS
NEOPLASM
SUBSTANCE ABUSE
VASCULAR TRANSPLANT
DIABETES PSYCHIATRIC
LUNG OPENINGS
METABOLIC
SPINAL EYE AMPUTATION
LIVER NEUROLOGICAL
KIDNEY DISEASE INTERACTIONS
GASTROINTESTINAL
ARREST SKIN DISABLED/DISEASE INTERACTIONS
MUSCULOSKELETAL
HEART INJURY
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If this HCC is found **2013 Disease Group Label** Then Drop these HCCs:
5 OpportunisMc InfecMons 112
7 MetastaMc Cancer and Acute Leukemia 8, 9, 10
8 Lung, Upper DigesMve Tract, and Other Severe Cancers 9, 10
9 LymphaMc, Head and Neck, Brain and Other Major Cancers 10
15 Diabetes with Renal ManifestaMons or Peripheral Circulatory ManifestaMon 16, 17, 18, 19
16 Diabetes with Neurologic or Other Specified ManifestaMon 17, 18, 19
17 Diabetes with Acute ComplicaMon 18, 19
18 Diabetes with Ophthalmologic or Unspecified ManifestaMons 19
25 End Stage Liver Disease 26, 27
26 Cirrhosis of Liver 27
51 Drug/Alcohol Psychosis 52
54 Schizophrenia 55
67 Quadriplegia/Other Extensive Paralysis 68, 69, 100, 101, 157
68 Paraplegia 69, 100, 101, 157
69 Spinal Cord Disorders/Injuries 157
77 Respirator Dependence/Tracheotomy Status 78, 79
78 Respiratory Arrest 79
81 Acute Myocardial InfarcMon 82, 83
82 Unstable Angina and Other Acute Ischemic Heart Disease 83
95 Cerebral Hemorrhage 96
100 Hemiplegia/Hemiparesis 101
104 Vascular Disease with ComplicaMons 105, 149
107 CysMc Fibrosis 108
111 AspiraMon and Specified Bacterial Pneumonias 112
130 Dialysis Status 131, 132
131 Renal Failure 132
148 Decubitus Ulcer of Skin 149
154 Severe Head Injury 75, 155
161 TraumaMc AmputaMon 177
If this HCC is found **2014 Disease Group Label** Then Drop these HCCs:
8 Metasta8c Cancer and Acute Leukemia 9,10,11,12
9 Lung and Other Sever Cancers 10,11,12
10 Lymphoma and Other Cancers 11,12
11 Colorectal, Bladder, and Other Cancers 12
17 Diabetes with Acute Com