Essentials for Anesthesia Groups on Hierarchical Condition Categories

Summary:

The Centers for Medicare and Medicaid Services uses a risk adjustment model based on a set of hierarchical condition categories for Medicare Advantage beneficiaries to make appropriate and accurate payments for enrollees with differences in expected costs. We encourage anesthesia practitioners to be aware of these categories, which can help enhance the thoroughness of their documentation and ensure that they receive appropriate payment.

​Anesthesia practices that partner with ABC for their anesthesia billing and coding needs know that our mantra for anesthesia practitioners in this realm is document, document, document. They know that thorough documentation at their end plays an essential role in allowing our billing team to demonstrate medical necessity for the services they provide and to ensure that they receive appropriate payment that accurately reflects the complexity of their work.

Under the hierarchical condition categories (HCC) risk adjustment model used by the Centers for Medicare and Medicaid Services (CMS) for Medicare Advantage beneficiaries, the implications of thorough documentation become particularly important for patients with chronic conditions, such as chronic heart failure, and multiple chronic conditions, such as hypertension, chronic obstructive pulmonary disease and Type 2 diabetes, or Type 2 diabetes complicated by diabetic mono-neuropathy. Failure to document all of these conditions, which can also affect the complexity of anesthesia care, can also result in unnecessary revenue loss for your practice.

As the ASA notes in a recent alert, however, this level of detail may not always change the payment for a case. But if you are participating in the Quality Payment Program's Merit-Based Incentive Payment System (MIPS), this level of documentation accuracy could help improve your performance in MIPS's Cost component, which will carry more weight in the coming years. In addition, states ASA, "it may be a relevant consideration when you negotiate with private plans as it can establish a more complete and accurate picture of the patients you care for and of the costs of the resources required to provide that care. It may also help you earn some good will with your hospital in terms of their DRG assignments."

By risk adjusting plan payments, CMS is able to make appropriate and accurate payments for enrollees with differences in expected costs based on the patient's health status and demographic characteristics, and to measure individual beneficiaries' relative risk. This risk adjustment is used to determine payments for each beneficiary's expected expenditures.

The risk adjustment model is based on a set of HCC codes (a fact sheet on the risk adjustment model with a chart of the HCC codes can be found here).

Of the approximately 70,000 ICD-10-CM codes, about 950 of these codes map to the HCCs. The following four HCCs were added in 2019:

• HCC 56: Drug Abuse, Uncomplicated, Except Cannabis

• HCC 58: Reactive and Unspecified Psychosis

• HCC 60: Personality Disorders

• HCC 138: Chronic Kidney Disease, Moderate (Stage 3)

These HCC codes risk adjust patients based on their state of health. Healthcare facilities and plans use this model to understand the risk level of patients and predict patient cost.

We recommend that you be aware of the conditions included in the HCC chart to help enhance the thoroughness of your documentation.

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