ICD10monitor and HRS recently collaborated to conduct a survey to assess where Talk Ten Tuesday’s listeners are positioned when it comes to Hierarchical Condition Categories (HCCs) in their workplaces. 

In line with the Talk Ten Tuesdays’ audience, the majority of the survey respondents were from the hospital setting. Our initial takeaway from the survey results was that more than half of the respondents indicated they are or will soon be using HCCs; however only 27 percent indicated that they had “above-average” or “expert” knowledge of HCCs. The results are indicative of the accelerating shift from the physician practice setting to the hospital setting, but they also suggest that we may be applying HCCs without the appropriate knowledge – which could potentially impact quality reporting and ultimately, reimbursement.

Over the last few months, ICD10monitor has been reporting how HCCs are becoming more important when coding from both the hospital and physician perspective. Historically, HCCs have been more prevalent on the physician side, but with the continuing shift toward value-based payments, HCCs are becoming essential for hospitals reporting risk adjustment (how sick your patients are) that impacts such payments.

The American Health Information Management Association (AHIMA) defines HCCs as follows: “diagnostic categories assigned based on diagnosis codes on encounter claims or on Medicare Advantage health plans. These categories filter patients into ‘buckets’ that are clinically similar and are expected to have similar cost patterns to predict future healthcare costs.”

Let’s look at the specific demographic results of the survey first.

Sixty-eight percent of our respondents were from a hospital or health system, with the remaining being from the physician office/practice setting, insurance/billing setting, a government or state agency, or consulting companies. These results support our interest in the hospital setting, since HCCs are fairly new to them.

Over half of the respondents to the survey, 52 percent, work in a health information management or coding department, followed by 24 percent working in the area of clinical documentation improvement (CDI). Compliance patient accounts, billing, quality, analytics, and “other” made up the remaining fields.

Fifty-seven percent of respondents had job titles in the “specialist” category, which included coders, CDI specialists, nurses, analysts, billers, auditors, and technicians, followed by 32 percent who work in management. The remaining respondents were comprised of vendors, c-suite, payers, and other specialties.   

HCC knowledge was fairly evenly distributed among respondents, with 38 percent having no knowledge or being at a novice level, 35 percent with average knowledge, and 27 percent with above-average or expert knowledge. Fifty-one percent noted that their organization currently performs HCC coding or will be starting soon. As mentioned in the opening paragraph, there is concern here for higher utilization of HCCs when knowledge may not be optimal.

The survey asked what the impetus for each organization’s utilization of HCC coding was, and it instructed respondents to check all that apply. The results revealed the following:

  • Medicare Advantage Plans – 43 percent
  • Medicare Shared Savings ACO – 19 percent
  • Value-Based Purchasing – 26 percent
  • Some Commercial ACOs/Shared Risk Arrangements – 17 percent
  • Health Insurance Exchange Plans – 10 percent
  • States Where Medicare/Medicaid Dual Eligible are Managed Care – 15 percent
  • Population Health/Risk Stratification/Cost Prediction – 18 percent
  • Other – 8 percent
  • N/A – 31 percent

This is a clear indication that risk adjustment programs are becoming more prevalent in organizations, and likely impacting additional areas of the various healthcare settings.

The survey responses indicated that organizations were applying HCC coding across a variety of service types, with respondents identifying the following:

  • Acute Inpatient – 41 percent
  • Outpatient – 34 percent
  • Physician Practice/Clinic – 40 percent
  • Freestanding Service (ASC, IDTF, Imaging Center, Lab, etc.) – 8 percent
  • Post-Acute (Rehab, Behavioral Health, LTAC, Skilled Nursing, Home Health, Hospice) – 14 percent
  • Other – 1 percent

In some instances, respondents were not aware which service types were applying HCCs (20 percent) or the question wasn’t applicable to them (16 percent).

In regard to the practice of receiving feedback regarding the results of HCC coding, 40 percent of respondents stated that feedback is shared with staff; 24 percent reported that feedback is not shared; 19 percent said they did not know if feedback was shared; and 17 percent reported that it was not applicable to them. This may indicate that organizations have some more work to do regarding improving their communication to staff as it pertains to key outcomes related to HCCs and risk adjustment. Sharing the feedback can help staff understand the significance of their work and the overall impact to the organization.

It is also important to monitor and report financial impact. HCCs and risk adjustments go beyond MS-DRGs and case mix to impact the potential for penalties or bonuses under the hospital value-based purchasing program, as well as affecting future non-Medicare payers by adjusting capitated payments. Forty percent of respondents stated that they perform or will be performing some form of financial HCC impact reporting, while 13 percent do not perform any, 39 percent don’t know if they do, and 8 percent stated that it was not applicable.

The results of the financial analysis indicated that 10 percent of respondents have seen a positive financial impact, with 1 percent reporting a neutral impact and 3 percent reporting a negative impact. Forty-eight percent reported that they do not know what the financial impact is, and 36 percent stated it was not applicable to them.

As far as who is using HCC coded data, respondents were asked to check all that applied, and they designated the following:

  • Health Information Management (HIM) – 24 percent
  • Quality – 20 percent
  • CDI – 22 percent
  • Business Office/Patient Accounting – 8 percent
  • Finance – 17 percent
  • Contracts – 7 percent
  • Compliance – 9 percent
  • I don’t know – 37 percent
  • N/A – 17 percent
  • Other – 4 percent

We expected to see that most users were from HIM, quality and CDI, but it’s clear to see that other areas of the organization are also utilizing the HCC data, so the impact of the risk adjustment process is gaining in importance – and likely already impacting more of our organizations’ outcomes. 

The areas noted as responsible for performing HCC coding in the organization were the following:

  • HIM Coders – 42 percent
  • CDI Staff – 17 percent
  • Physician Office Staff – 13 percent
  • Physicians – 13 percent
  • Billers – 3 percent
  • I don’t know – 27 percent
  • N/A – 20 percent
  • Other – 4 percent

Again, we expect that the HIM and CDI staffs have a major role in the process, since that’s where most code assignment is conducted, but the results show that there are others working outside of these two areas who are also responsible for this assignment and need to have a strong knowledge of HCCs.

The survey concluded with 37 percent responding that staff has either received HCC training or that training is planned, and 39 percent have not yet received training. This result sparked some concern, given the number of responses indicating that HCCs are currently being utilized and applied. Given the impact that HCCs have on both patient severity and financial perspectives, it is critical that all staff working with HCCs understand the application and significance of risk adjustment so that data quality and reimbursement are accurate. The results of this HCC survey reflect the progression toward value-based payments, and even with the recent presidential election outcome and the threatened repeal of the Patient Protection and Affordable Care Act (PPACA), industry experts continue to support and predict a move in this direction. Clearly, risk adjustment plays an important role in this and many other healthcare industry initiatives.

ICD10monitor understands the need to continue to provide additional information, insight, and education to Talk Ten Tuesdays’ listeners. We look forward to hearing more from you about your experiences, as well as your specific needs in the area of risk adjustment and HCCs. We will work to help you gain further knowledge relating to this important and timely topic.

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