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Addressing Challenges in Implementing HCC Coding and Risk-Adjusted Coding Programs

By Eric McGuire

November 2, 2023

Hierarchical Condition Category (HCC) coding, originally designed by the Center for Medicare and Medicaid Services (CMS), plays a pivotal role in estimating healthcare costs, managing patients with multiple chronic conditions, and supporting the transition to value-based care. It helps provide a complete picture of the health status of a patient to enable physicians and health plans to better predict the resources required to manage and treat the patient.

However, implementing HCC coding and risk adjusted coding programs comes with its own set of challenges to navigate to ensure accurate and efficient coding. These include:

  1. Provider Engagement: With HCC coding, it is not enough to simply list diagnoses in medical records; they need to be supported by evidence. Providers need to respond to queries and work with HCC and CDI teams to correct documentation and capture as appropriate. This places additional demands on healthcare providers to document the necessary details, skills, and nuances accurately, which can be time-consuming.
  2. Lack of Electronic Capabilities: Many healthcare organizations still rely on manual querying processes for ProFee and HCC coding. Not only is this time-consuming, but it's also highly complex. Additionally, it often results in low query response rates from physicians, making the process less efficient and accurate.
  3. Lack of Electronic Queries: Capturing multiple diagnoses for a single patient visit using manual coding methods can be tedious and prone to errors. The absence of electronic query capabilities further exacerbates this issue.
  4. Limited HCC-Specific Tools: The lack of HCC-specific tools to track multiple encounters, productivity, and quality, especially in relation to Risk Adjustment Factor (RAF) scores, poses challenges. Making these specialized tools effective requires collaboration among various stakeholders, including health plans, physicians, coders, and CDI specialists.
  5. Outpatient CDI Capabilities: While CDI on the facility side is well-established, outpatient CDI capabilities and processes are often underdeveloped, with many healthcare organizations needing to prioritize other areas over professional and HCC coding.
  6. Staffing Shortages: Finding qualified HCC coders with the appropriate skill set can be a significant challenge when implementing an HCC program.

To overcome these challenges, healthcare organizations are encouraged to adopt the following best practices.

  1. Effective Provider Engagement: Overcoming provider engagement challenges requires implementing various strategies to actively involve healthcare providers. Effective approaches include tailored education programs, prospective outreach, and creating a culture that recognizes the importance of accurate coding.
  2. Comprehensive Document Scope: Accurate coding relies on having all relative documentation. Healthcare organizations must expand their document scope to include all necessary patient documents to ensure no critical information is overlooked. This includes ancillary reports, labs, pathology reports, radiology reports, and operative notes.
  3. Accurate Documentation: Accurate and complete documentation is crucial, along with adherence to the MEAT standard (Monitoring, Evaluation, Assessment, and Treatment). Specificity around diseases or conditions is essential to support accurate coding.
  4. Leverage Natural Language Processing (NLP): NLP can be used to streamline coding processes, identify missing information, and provide auto-suggestions. NLP not only saves time but also aids in capturing critical details for accurate coding.
  5. Reporting and Dashboards: Healthcare organizations can utilize reports and dashboards to manage populations, identify areas for improvement, and monitor provider performance. These valuable tracking tools provide insights and facilitate data-driven decision-making.
  6. HCC Revenue Forecast: Forecasting HCC revenue helps providers understand the potential reimbursement and can help motivate them to engage actively in the HCC program. It highlights the value of accurate coding and encourages involvement from healthcare providers.
  7. Role of AI: The integration of AI, such as Computer-Assisted Coding (CAC) or CAPC, can significantly expedite the coding process. These tools enhance accuracy and provide real-time dashboards for continuous improvement.

Implementing HCC coding and risk adjusted coding programs presents healthcare organizations with challenges that require strategic solutions. By adopting best practices that address provider engagement, embrace technology, expand document scope, and leverage AI tools, hospitals and health systems can navigate these challenges more effectively to ensure accurate coding and improved reimbursement rates. In the era of value-based care, mastering HCC and risk adjusted coding is a critical step towards providing a high-quality healthcare experience while effectively managing costs.

Learn more about applying HCC and risk adjustment coding with medical coding software in our on-demand webinar, Addressing Challenges in Implementing HCC Coding.

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AGS Health is more than a revenue cycle management company—we’re a strategic partner for growth. Our distinctive methodology blends award-winning services with intelligent automation and high-touch customer support to deliver peak end-to-end revenue cycle performance and an empowering patient financial experience.

We employ a team of 12,000 highly trained and college-educated RCM experts who directly support more than 150 customers spanning a variety of care settings and specialties, including nearly 50% of the 20 most prominent U.S. hospitals and 40% of the nation’s 10 largest health systems. Our thoughtfully crafted RCM solutions deliver measurable revenue growth and retention, enabling customers to achieve the revenue to realize their vision.