CMS in the News: 3 Major Announcements Related to HCCs


by Rose T. Dunn, MBA, RHIA, CPA, FACHE

The last few weeks have been busy ones for those of us who work in Hierarchical Condition Categories (HCC) coding. CMS made three major announcements. Let’s look briefly at each.

Changes to the Coefficient Calculation
For 2022, the coefficient calculation will be based solely on encounter data according to an article in Fierce Healthcare by Paige Minimyer. Before 2022, the coefficient calculation was based on a hybrid model that took both the encounter data and actual CMS costs of Medicare Advantage Organization (MAO) HCCs into consideration. The change has been controversial since it was introduced. The concern expressed by MAOs is that the coding of diagnoses from regular fee-for-service encounters is not as accurate as the coding done in an MAO. This concern is not entirely unfounded and may be due, in my opinion, to the fee-for-service environment where the provider is paid based on the E/M code submitted, not necessarily the diagnoses. However, the MAOs bear some responsibility for the continued use of unspecified or omission of diagnoses because not all MAOs pay their providers on the HCC and have continued to pay on a fee-for-service basis, thus perpetuating the inaccuracies. For the full story, click here.

CMS Calling for MAOs to Improve Denial Information
CMS is criticizing the practice of some MAOs who provide inadequate denial information when denying a claim or portion thereof for non-participating providers according to an article by Chuck Buck in RAC Monitor News. The inadequate denial information leaves the provider stranded without any substantial information on which to appeal. I know of payers that have used this strategy to deny payments as well as some that do not issue explanations for their denials until a month or more later to possibly delay payments to or distract providers. MAO payers should be more transparent and reasonable in their course of business with providers who are providing much needed care for their patients. This may represent an opportunity for MAOs to hire more HIM and Compliance professionals who could make their mark on MAOs and promote fair business practices. For the full story, click here.

OIG Finds Faulty Coding Leading to Overpayment in MAO Sector
A recent post in Becker’s by Morgan Haefner shared that the OIG has, again, found faulty coding occurring in the MAO sector. Haefner stated that “select diagnosis codes for acute stroke that map to the ischemic or unspecified stroke hierarchical condition categories are at high risk of being miscoded, according to the OIG. For its audit, OIG reviewed claims for 582 transferred enrollees who received a high-risk acute stroke diagnosis code in 2014 or 2015 to see if medical records support the submitted codes. OIG found nearly all of the selected acute stroke diagnosis codes that physicians submitted to CMS under traditional Medicare that CMS later used to make payments to Medicare Advantage organizations didn’t comply with federal requirements. This resulted in overpayments of $14.4 million to the Medicare Advantage organizations.” One suggestion for the MAOs would be to hire qualified and certified coding professionals who understand ALL the coding rules. Let’s get the physicians out of the coding business and back into the care and documentation business. For the full story, click here.

End of Year Reminder
Finally, as we are approaching the end of the year, the time is now when we should be conducting audits of our claims submitted during 2020 to identify any additional revisions that should be made, submitting claims for those HCCs that we may have missed, and aggressively following-up on documentation that remains incomplete, illegible, and unauthenticated so those encounters can be billed and captured in the year end data for our practices.

HCC: Fundamentals of Hierarchical Condition Categories
Go beyond just the diagnoses — really understand the methodology behind HCCs! Prepare for the future of healthcare reimbursement with HCC: Fundamentals of Hierarchical Condition Categories, by nationally recognized HCC authority Rose T. Dunn, MBA, RHIA, CPA, FACHE. Learn more here.

About the Author

Rose Dunn
Rose Dunn is the Chief Operating Officer at First Class Solutions, Inc., a healthcare information management leader since 1988. Rose is the author of “The Revenue Integrity Manager’s Guidebook” available from the National Association of Healthcare Revenue Integrity and other books on Coding Management and Auditing from HCPro. She engaged herself in ICD-10 more than 10 years before it was implemented. She is assisting Libman Education in the development of an HCC educational program. Rose holds a BS and MBA from Saint Louis University.

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