Improving Revenue and Care in Your Medicare Advantage Population

In 2021, patients participating in Medicare Advantage (MA) plans accounted for more than 40% of the Medicare population, and that number continues to climb. Healthcare organizations with Medicare Advantage populations need to utilize hierarchical condition categories (HCC) diagnoses and tools to ensure they are not leaving revenue on the table.

HCCs are sets of medical codes for specific diagnoses and are used in tandem with a payment model that reimburses organizations based on the risk associated with patients. Patients are assigned a total risk adjustment factor (RAF) score based on individual diagnoses, which are all weighed and ranked.

Based on a patient’s RAF score, the Centers for Medicare and Medicaid Services (CMS) estimates the annual cost of caring for the patient. Patients with higher RAF scores are considered higher-risk, and healthcare providers who diagnose and code to a matching level of clinical severity ensure that more money is allocated to care for these patients. Healthcare organizations are then rewarded for managing the care of these patients in an effective and cost-efficient manner—ultimately keeping a portion of dollars saved as revenue.

The Benefits of Prioritizing Hierarchical Condition Categories:

Accurate HCC diagnosis among high-risk patients affords organizations the ability to track patients requiring high levels of care. CMS requires providers to address or “capture” HCC diagnoses annually on a calendar-year basis, with many patients having multiple HCCs on their charts. That’s why it’s important for healthcare organizations to have appropriate software in place to both prompt for and track the capture of HCCs. Having the right software and reporting protocols in place results in improved management of the MA high-risk patient.

MA programs and accountable care organizations are two of the most prevalent programs where the HCC model is applied. Close adherence to the HCC model provides three key advantages:

1. better funding

HCC medical diagnosis coding and billing helps providers secure the appropriate funding to care for higher-risk patients. Accurate coding to the appropriate level of clinical severity is key. Patients coded at levels lower than their actual levels of clinical severity will appear to be healthier than they really are based on their resulting RAF score. As a result, inaccurately scored RAFs ultimately equate to growing costs for your healthcare organization.

2. Improved Patient Services 

Increased revenue allows providers to offer more services to high-need patients. The ability to prove where higher levels of care are needed by using HCC diagnoses allows providers to attain more funds to expand capabilities, whether that be hiring RNs for care management or navigators to assess home situations, they can offer needed services to this population. This also means happier patients, which leads to better engagement, improved satisfaction, and improved outcomes.

3. Optimized Care Costs

This is the age of value-based care, so it’s imperative to provide effective and efficient care for high-risk patients. Most payers representing MA patients negotiate with healthcare organizations on two levels: Per member per month (PMPM) is a rate coupled with quality incentives. The PMPM typically reflects the average RAF scores of that organization; therefore, the payment is aligned with patient needs and quality outcomes. An accurate RAF score ensures providers are incentivized to provide the right amount of care for the right patients at the right time.

Get Started With Hierarchical Condition Category Coding

Executing a program to effectively code for and capture HCCs comes with other improvement opportunities: provider training, problem list management, implementation of provider panel balancing strategies, as well as patient allocation. The success of any HCC program requires addressing these important areas systematically and concurrently.

Diagnosing patients is an important part of any provider encounter; therefore, user-friendly HCC documentation tools and proper training to utilize them are key to success. There’s no point in having good tools if no one knows how to leverage them correctly. HCC software is designed to streamline the HCC process minimizing provider burden.

Strategically caring for patients isn’t limited to when they are in the office. HCC gives an organization the ability to easily stratify their MA patients by risk using lists and registries to address yearly visits, gaps in care, and other areas of need.

Operationally, HCC coding, if used strategically, can more efficiently manage provider panels. Having HCC registries behind the scenes that are capable of tying patients to specific physicians can prevent specific providers from being overwhelmed by a disproportionate number of higher-risk patients.

Indeed, there is a lot to manage to effectively use HCC coding, but that’s what CTG is here for: helping healthcare organizations manage the tools and software that goes with HCC models. CTG’s HCC implementation plan ensures HCC codes are properly utilized, leading to better health outcomes, greater profits, and less burnout.

Connect with a CTG expert today to crack the HCC code.

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