HCC relies on ICD-10 coding to assign risk scores to patients. Each HCC is mapped to an ICD-10 code and has a risk score associated with it. Along with demographic factors (such as age and gender), CMS
Centers for Medicare and Medicaid Services
The Centers for Medicare & Medicaid Services, previously known as the Health Care Financing Administration, is a federal agency within the United States Department of Health and Human Services that administers the Medicare program and works in partnership with state government…
What is risk adjustment in medical billing?
- “Ensure the accuracy and integrity of risk adjustment data submitted to CMS. ...
- Implement procedures to ensure that diagnoses are from acceptable data source. ...
- Submit the required data elements from acceptable data sources according to the coding guidelines.
What is Medicare risk adjustment model?
risk adjustment system. CMS has established a risk model that uses data from claims in the traditional Medicare program to assign the relative values for health care conditions (e.g., diabetes, chronic kidney disease, congestive heart failure), and other factors, that determine Medicare Advantage risk scores. An individual beneficiary's risk score in
What are risk adjustment factors?
Risk Adjustment Factors — known as RAFs — are the average risk scores for specific HCCs. They’re used in combination with demographics to determine an individual’s final risk score. The higher a person’s RAF, the more likely it is that they’ll end up in high-risk adjustment programs or see increased premiums due to their diagnosis ...
What is healthcare risk adjustment?
These include anxiety disorders, depressive disorders, stress and adjustment disorders ... more predisposed to mental health problems and known to be at higher risk of catching COVID, so it ...
Is HCC related to Medicare risk adjustment?
The CMS-HCC model is a prospective risk-adjustment tool implemented by CMS in 2004 to estimate future expenditures for Medicare beneficiaries. It was initially employed by CMS to adjust capitation payments to MA plans but is now used to calculate expenditure benchmarks for MSSP ACOs as well.
How does HCC risk adjustment work?
Both HCC models use a risk adjustment factor (RAF) score to calculate expected future health costs for each patient. Instead of providing one base payment for every patient, the risk adjustment model allows for more accurate payments for expected costs based on health status and demographics of every enrollee.
How is Medicare risk adjustment score calculated?
The purpose of the Medicare risk scores is to estimate a relative cost factor. (i.e., it is a payment risk score). CMS calculates individual beneficiary-level risk scores by adding the relative factors associated with each beneficiary's demographic and disease factors. The CMS Payment Risk Score is built up each year.
How does Medicare risk adjustment work?
Risk adjustment is a statistical method that seeks to predict a person's likely use and costs of health care services. It's used in Medicare Advantage to adjust the capitated payments the federal government makes to cover expected medical costs of enrollees.
How is HCC risk score calculated?
The CMS-HCC risk score for a beneficiary is the sum of the score or weight attributed to each of the demographic factors and HCCs within the model. The CMS-HCC model is normalized to 1.0. Beneficiaries would be considered relatively healthy, and therefore less costly, with a risk score less than 1.0.
How is risk adjustment done?
Risk adjustment starts with gathering statistics—including patient demographics, diagnoses and professional encounter data. The data is used to assign each member in the plan a risk score. Risk scores are based on members' active chronic medical conditions and the additional Medicare-approved services they require.
How does HCC coding work?
HCC coding relies on ICD-10-CM coding to assign risk scores to patients. Each HCC is mapped to an ICD-10-CM code. Along with demographic factors such as age and gender, insurance companies use HCC coding to assign patients a risk adjustment factor (RAF) score.
What is an average risk score?
For most payers, a risk score of 1.000 is an average patient. Medicare calculates a beneficiary's RAF on an annual basis or cost per beneficiary per year. For example, if the RAF for your patient is 1.000, Medicare would expect to spend $10,000 on that patient.
How is RAF calculated?
The amount the government pays is calculated by a formula—multiplying the government's “county rate” by the patient's risk adjustment factor or RAF score. County rate x RAF score = Monthly capitation rate.
How does risk adjustment affect payments to managed care plans?
Risk adjustment allows CMS to pay plans for the risk of the beneficiaries they enroll, instead of an average amount for Medicare beneficiaries. By risk adjusting plan payments, CMS is able to make appropriate and accurate payments for enrollees with differences in expected costs.
What is the RAF score?
A RAF score, or risk adjustment factor score, is a medical risk adjustment model used by the Centers for Medicare & Medicaid Services (CMS) and insurance companies to represent a patient's health status. RAF scores are used to predict the cost for a healthcare organization to care for a patient.
Why are patients assigned to more than one category?
Patients are often assigned to more than one category because the combination of demographic information and risk factors can cumulate to represent more than one kind of illness or potential for illness.
What is meat in HCC?
MEAT is an acronym used in HCC to ensure that the most accurate and complete information is being documented: Monitor signs and symptoms, disease process. E valuate-test results, meds, patient response to treatment. A ssess/Address-ordering tests, patient education, review records, counseling patient and family members.
What does the ACA mean?
The Affordable Care Act (ACA) ensures that insurance companies are no longer offering less expensive insurance plans to healthy patients who rarely visit the doctor and ...
Is HCC coding good?
Since costs can vary widely among patients, risk adjustment can now be used to evaluate patients on an equal scale. It opens up a world of new opportunities for coders and providers and may make reimbursements more efficient. And that’s good news for your revenue cycle performance.
Why is HCC coding important?
Although HCC coding accuracy and risk adjustment requires changes to the way healthcare organizations are documenting and coding chronic conditions, doing so can help the organization capture more complete diagnoses, resulting in higher and more appropriate reimbursement and improved care delivery for complex patient populations.
What is RAF in Medicare?
Population complexity/severity affects payment in many Medicare contracts. RAF is used for benchmarking for quality and safety. RAF enables identification and stratification for patient management.
Does CMS require documentation?
CMS requires that all qualifying conditions be identified each year by provider organizations. Documentation linked to a non-specific diagnosis, as well as incomplete documentation, negatively affects reimbursement.
Is HCC coding intuitive?
As with starting any new initiative, HCC coding is not intuitive, but accurate HCC coding is necessary for healthcare organization s in order to receive fair compensation. Below are a few highlights to know about the CMS HCC model complexities and risk adjustment use:
What is Medicaid risk adjustment?
Medicaid risk adjustment identifies the demographics of an enrollee and uses different values of risk score calculation for disabled individuals, adults, and children. The Medicaid risk adjustment model is concurrent in that the current year’s diagnoses affect the current year’s risk score.
What is the purpose of capturing diagnoses in an HCC model?
The purpose of capturing diagnoses in an HCC model is to offer an accurate assessment of the patient’s health status, and correct reporting of diagnosis codes is essential to this process. Not every one of the more than 70,000 diagnosis codes available in the ICD-10-CM code set maps to an HCC to be used in HCC risk score calculation; only conditions that are costly to manage from a medical or prescription drug treatment perspective are likely to be found in the risk adjustment model’s HCC crosswalk.
What is the importance of HCCs?
Another important aspect of HCCs is that risk adjustment payment models are additive. That means values of each HCC are added together to establish the overall risk score of a member (unless a diagnosis is trumped by a more severe diagnosis in the hierarchy family, as explained above).
What is a risk score?
A risk score is the numeric value an enrollee in a risk adjustment program is assigned each calendar year based on demographics and diagnoses (HCCs). The risk score of an enrollee resets every January 1 and is officially calculated by the state or government entity overseeing the risk adjustment program the member is enrolled in. Another term for risk score is risk adjustment factor (RAF), sometimes referred to as RAF score.
What is Medicaid Chronic Illness and Disability Payment System?
Medicaid Chronic Illness and Disability Payment System (CDPS) is the risk adjustment payment methodology states use for Medicaid beneficiaries who enroll in a Managed Care Organization (MCO). While each state has its own set of eligibility criteria, in general, Medicaid (the federal branch of CMS partnering with states) provides health coverage for qualified low-income families and children, pregnant women, the elderly, and people with disabilities. Medicaid beneficiaries may enroll or disenroll at any time. Applying for Medicaid can be done on the Marketplace exchange.
What is risk adjustment contract?
Remember that the risk adjustment contract is between the program agency (state or federal government) and the health plan. If payments based on diagnoses are not supported in a RADV, the program agency will recoup overpayments from the health plan, not the provider.
What is the formula used to compare a plan's risk score to the average across all plans?
According to the National Health Council, CMS applies a formula to compare each plan’s average risk score to the average across all plans. Typically, if a plan’s risk score is higher than the average risk score for all plans in their state, the plan gets additional money called a transfer payment.
What is the coding intensity adjustment for Medicare Advantage?
Since 2010, Congress has required CMS to apply a coding intensity adjustment to Medicare Advantage payments that is an across the board cut to Medicare Advantage risk scores. The purpose of the adjustment is to account for differences in coding patterns between Medicare Advantage and FFS Medicare — differences that are a function of the differences between the structural payment and care models in the Medicare Advantage and FFS Medicare programs. Per statute, the coding intensity adjustment has increased from a 3.41% reduction in 2010 to a 5.91% reduction for payment year 2018. The coding intensity adjustment must remain no less than a 5.91% reduction to risk scores for all subsequent years. CMS has the authority to determine the amount above the statutory minimum. To date, CMS has applied the minimum coding intensity adjustment required by law.
What is risk adjustment?
Risk adjustment is an essential mechanism used in health insurance programs to account for the overall health and expected medical costs of each individual enrolled in a health plan. Accurate documentation of diagnoses by clinicians is a critical component of the risk adjustment process.
What is Medicare Advantage?
These plans are approved and regulated by the Centers for Medicare & Medicaid Services (CMS) and the program undergoes an annual review process that makes policy changes and sets payment rates for the next year .
What is the 2014 HCC model?
In 2013, CMS announced it would phase in a new CMS-HCC risk adjustment model (the“2014 Model”) that removed certain diagnosis codes related to early stages of chronicdiseases, such as diabetes and chronic kidney disease, meaning plans would no longerget payment for those diagnoses. The elimination of these codes reduced the resourcesthat were previously available for early intervention of chronic disease.
What is the difference between FFS and Medicare Advantage?
Accurately identifying illness is key to the comprehensive approach to care in Medicare Advantage. FFS Medicare reimburses providers separately for each episode of care. In contrast, Medicare Advantage is structured to encourage early identification of illness, coordinated care, and improved beneficiary health outcomes.
Does risk adjustment occur across metal levels?
Risk adjustment occurs across metal levels. Plans in different metal levels will not only have different expenditures for the same condition, the range of the relative expenditures for low and high risk individuals will be farther apart in a bronze plan than in a platinum plan.
Can you receive ACA transitional reinsurance?
Plans in the individual market that receive risk adjustment payments may also receive ACA transitional reinsurance payments for the same high risk enrollees. Adjusting for transitional reinsurance payments would address concerns that a plan could be compensated twice for the same high-risk individuals
How many HCCs are there in the HHS risk adjustment model?
There are 264 HHS-HCCs in the full diagnostic classification, of which a subset is included in the HHS risk adjustment model. The criteria for including HCCs in the model are now described. These criteria were sometimes in conflict and tradeoffs had to be made among them in assessing whether to include specific HCCs in the HHS risk adjustment model.
What is the difference between CPT and HCPCS?
8 CPT® is the Current Procedural Terminology maintained by the American Medical Association, and HCPCS is the Healthcare Common Procedure Coding System maintained by the Centers for Medicare and Medicaid Services.
Can I buy health insurance through the marketplace?
Beginning in 2014, individuals and small businesses are able to purchase private health insurance through competitive Marketplaces. Issuers must follow certain rules to participate in the markets, for example, in regard to the premiums they can charge enrollees and also not being allowed to refuse insurance to anyone or vary enrollee premiums based on their health. Enrollees in individual market health plans through the Marketplaces may be eligible to receive premium tax credits to make health insurance more affordable and financial assistance to cover cost sharing for health care services.
