CMS Risk Adjustment Payment Methodology

The Role of Physicians and Supporting Staff

Presented by:Presented by:Pam Holt, PacifiCarePam Holt, PacifiCare

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Background• Change Payment Methodology - mandated by BBA

– CMS chose a risk model based on chronic additive conditions

– Previous reimbursement methodology was based solely on demographic information (age/ sex/ medicaid status/ county of residence, etc.)

– Risk Adjustment pays more accurately for the predicted health cost expenditures by adjusting payments based on health status as well as demographics

– Payments are higher for less healthy members and lower for more healthy members

– Accurate chart documentation and diagnosis reporting now determines reimbursement

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Risk Adjustment Models

• Beginning January 2004 - CMS-HCC– Hierarchical Condition Category “Model

determines a portion of the per member payment”• Payment in 2004 is based on 30% risk adjustment and

70% demographic data; 2005 = 50% risk• 70 disease categories; over 3,100 diagnoses• “Additive” model includes all qualifying diagnoses• “Predictive Model: 2005 payment based on CY2004

encounter data

– Health Status is re-determined each year

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Data Sources?

• Inpatient data• Hospital Outpatient data• Face-to-face Physician / PA / NP visit data

Exclusions:• SNF, Hospice, and ICF (Facility Components)

• Lab, Radiology, Ambulance, DME, Prosthetics, Orthotics, and ASCs

• Members flagged as Hospice & ESRD

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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– Is your documentation sufficient to fund the care for

your sicker patients?

• The quality of diagnosis coding must improve in order to maintain the same $

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100% When?

• 2000 - 2003

• 2004

• 2005

• 2006• 2007

• 90% demo/10% risk

• 70% demo/30% risk

• 50% demo/50% risk

• 25% demo/75% risk

• 100% Risk

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Financial ImpactPIP-DCG vs CMS-HCC

• Female, 76 years old, Medicaid eligible, COPD, CHF, vascular disease with complications

PIP-DCG

Model (2003, no encounter submitted)

PIP-DCG Model

(2003, proper coding; 90/10)

CMS-HCC Model

(2004, no encounter submitted)

CMS-HCC Model

(2004, proper coding; 70/30)

CMS-HCC

Model

(2005, no encounter submitted)

CMS-HCC Model

(2005, proper coding; 50/50)

$10,632.48/yr

$13,610.32/yr

$9,986.31/yr

$14,396.34/yr

$ 9,725.66/yr

$ 17,656.14/yr

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How much does it matter?

Note: Some categories have a hierarchy, such as Diabetes, in such categories, only the highest HCC would “count”

$ 3,152 $1,852250.4x D. w/ renal or peripheral circulatory manifestations

HCC15

$ 2,277$ 1,338 250.6x D. w/ neurologic manifestations HCC16

$ 1,613$ 948 250.1-3x D. w/ acute complications HCC17

$ 1,415$ 831 250.5x D. w/ ophthalmic manifestations HCC18

$ 825$ 485 250.00 Diabetes w/ no complications HCC19

Annual Reimb

2005; 50%:

Annual Reimb

2004; 30%: HCC:

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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)

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Top Ten Frequent HCCs by Occurrence (from FFS Medicare data)

HCC108 - COPD

HCC80 - CHF

HCC19 - Diabetes without complications

HCC105 - Vascular disease

HCC92 - Specified heart arrhythmias

HCC10 - Breast, prostate, colorectal and other cancer tumors

HCC83 - Angina

HCC96 - Ischemic or unspecified stroke

HCC38 - Rheumatoid arthritis & infl conn…

HCC82 - Ischemic heart disease

12.17%

11.17%

10.79%

9.36%

8.93%

6.99%

5.04%

3.97%

3.85%

3.82%

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How can you help?

• Physician is responsible for ensuring that coding adheres to ethical standards

• Physician office staff responsible for coding 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)

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How can you help? (cont’d)

• Rules for Coding in the physician office are different than the rules for inpatient hospital settings:– 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.)

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Correct Coding Tips

ICD-9-CM Official Guidelines for Coding state:

“Code all documented conditions that coexist at time of the encounter/visit, and require or affect patient care treatment or management. Do not code conditions that were previously treated and no longer exist. However, history codes (V10-V19) may be used as secondary codes if the historical condition or family history has an impact on current care or influences treatment.”

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Correct Coding Tips

The Diagnosis Portion of ICD-9-CM consists of two volumes:

Disease Index:• Alphabetical - aka Volume II of ICD-9-CM• Index of diseases and injuries; leads the reader to a code in

the Disease Tabular section to determine if it is the most specific code

Disease Tabular:• Numeric - aka Volume I of ICD-9-CM• Numeric listing of codes organized primarily by body system. • Much more detailed than the Alphabetical Index

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Correct Coding Tips

ICD-9-CM Coding to the Highest Level of Specificity• Diagnosis codes have 3, 4 or 5 digits• Diagnoses should be reported to the highest level of code

available for that category• In selected cases, the fifth digit may impact whether the code is

in the model, but at a different HCC level, which could impact reimbursement

• Myocardial Infarction (MI) 410.XX, unspecified or subsequent episode fifth digits 0 and 2 = HCC82

• All initial care for a new MI, should have the fifth digit of “1” and group to HCC81

• Old MI (412) is in the model

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Correct 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: 402.91• Using the Hypertensive heart disease code by itself, does not risk adjust• See Asthma with COPD example in handout

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

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Coding Tips (cont’d)

Multiple Coding Techniques• When the terms “code also,” “code first,” or “use

additional code” are included in the ICD-9-CM code book 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 294.10 for the manifestation of dementia.

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Correct Coding Tips

Clinical Specificity in Documentation Leads to Correct Coding

• Correct coding can make the difference between a code that does or does not trigger additional payment

• Anemia (285.9) is the most commonly coded form of anemia in physician offices. However there are many types of anemia. Some are in the model and some are not. i.e if “Neutropenia” is used to describe the anemia, then 288.0 (agranulocytosis) may be coded= HCC45.

• Pneumonia (486) unspecified is not in the model. If the organism responsible for the pneumonia (HCC111-112) is known, or if the physician documents that the patient aspirated prior to developing the pneumonia (507.0 HCC111), the more specific code should be reported.

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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)

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Most Important Coding Tip:

“If it’s not documented,

then …

it didn’t happen!”

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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

• Chart/Progress Notes Pages: Template to prompt complete evaluation & documentation

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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”

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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

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Superbill / Charge Ticket

• Designed to include most frequently used procedures and diagnoses

• Include as many diagnoses as possible, and prompt coding to the highest level of specificity

• Ask physician for more clarification• Review Annually; Update as needed

– ICD-9-CM & CPT Codes can change annually– Specific, not generic, diagnosis codes– Include Diagnosis Codes “in” the HCC Model

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CMS Data Validation

• CMS audits charts to confirm the diagnosis exists in the patient’s medical record for the period indicated– Requires compliance by the Health Plan, Group &

Physicians’ office to pull/review the charts

• Discrepancies will result in payment adjustments

• Diagnosis MUST BE CONFIRMED– Example: Radiologist or Pathologist report provides an

impression (diagnosis) that is in the HCC model, patient’s physician must subsequently confirm that diagnosis and document in the medical record

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ICD9 CM DX Training

• Web Based Training available via CMS Web Site– http://www.cms.hhs.gov/– Go to: Providers– Click on: Physicians– Search Box: coding– Click on: ICD9 CM Diagnosis Coding– Click on: Web Based Training (WBT) for ICD-9 Coding– Click on: Web/Computer-Based Courses

• Free ICD9 DX Coding web site: www.flashcode.com

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Summary

• BACK TO BASICS• Complete and Proper Chart Documentation• Diagnosis Coding to the Highest Level of Specificity• Design Fee Tickets to Support Correct Diagnosis Coding

– ICE Web Site– The following link will take you to the ICE Library where some of the

HealthCare Partners sample super bills can be viewed. http://www.iceforhealth.org/library/default.asp?CurrentCategoryID=167&CurrentSubCategoryID=749#subcategory749

• Conduct Complete Evaluation of Chronic Conditions at Least Annually

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Questions?