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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