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Fall 2023

Documentation Dilemmas: HCC Overhaul Brings New Documentation Challenges
By Elizabeth S. Goar
For The Record
Vol. 35 No. 4 P. 6

The dawn of 2024 will usher in the 28th version of CMS’s hierarchical condition categories (HCC)—a long overdue upgrade to the model used to assign risk adjustment factor scores and estimate future health care costs. The switch, which will be phased in over three years, aligns the underlying methodology with the ICD-10-CM code set.

“Even though the industry has been reporting ICD-10-CM codes for a while, the fundamental logic for HCCs was still based off when the program was established, which at the time were ICD-9-CM codes. It has taken … until recently for CMS to do their data analysis on ICD-10-CM codes with cost data and expenditures,” says June Bronnert, vice president of global clinical services with Intelligent Medical Objects. “Upon doing this analysis, they found that … in general, the change was going to be large enough that it warranted a new version, which also included new numbers as well as new clinical titles for those category numbers.”

What’s Changed
According to Vanessa Youmans, MA, RHIA, CCS, CPC, vice president of coding services at YES HIM Consulting, the new HCC model classifies the approximately 74,000 ICD-10-CM diagnoses codes into 266 HCCs, 115 of which are included in the 2024 payment model. This increase in condition categories is due to the greater level of detail within ICD-10-CM diagnosis codes.

“However, the 2024 model contains approximately 20% fewer ICD-10-CM codes than the 2020 model, which resulted from the removal of diagnoses in accordance with CMS’s risk adjustment principles,” she says.

According to CMS, the overarching goal of the new model is to decrease discretionary diagnostic categories based on Principle 10 of its long-standing model principles, which strives to reduce coding variations in risk-adjustment models. The focus of the changes is on those HCC codes with the highest variations between Medicare Advantage (MA) and fee-for-service. In addition to aligning with the rest of the health care system, which has been using ICD-10-CM since 2015, HCC v28 incorporates newer data and includes clinically based adjustments to ensure that conditions are stable predictors of costs.

“These adjustments help ensure payments accurately reflect what it costs to care for beneficiaries and make the model less susceptible to discretionary coding, which can lead to excess payments to MA plans,” according to a CMS announcement of HCC v28. “These updates improve the model’s ability to predict the cost of care and ensure MA risk-adjusted payments are as accurate as possible, which ultimately makes sure MA plans are paid enough to deliver the benefits that their enrollees are entitled to.”

Among the changes considered most impactful by Association of Clinical Documentation Integrity Specialists interim director Laurie L. Prescott RN, MSN, CCDS, CCDS-O, CDIP, CRC, who is also director of clinical documentation improvement (CDI) education at HCPRo, are the exclusion of malnutrition and the removal of a specific HCC capturing transplants. Additional changes include the following:

• The skin disease group now groups to a hierarchy differentiating both pressure ulcers and chronic ulcers of the skin by severity or depth of the wound.

• The neoplasm disease hierarchy increases from five levels to seven.

• HCC 85 related to heart failure has been eliminated, and heart failure has been expanded to seven different HCCs to include heart transplant status (HCC 221).

The latter change “reflects the increased granularity within ICD-10-CM,” Prescott says. “I honestly could provide you with numerous more changes that will impact risk scores but will add just one more: v24 offered numerous opportunities for additional impact related to disease interactions; although v28 offers such opportunities, they are noticeably less in number than the previous version.”

Documentation Impacts
The heightened level of granularity required under HCC v28 will have the greatest impact on clinical documentation. According to Prescott, because HCC v24 was based upon the structure of ICD-9-CM, it lacked the granularity of v28. Specifically, “the diagnoses that triggered HCC capture did not require as much specificity as one would expect,” she says. Youmans concurs, noting that the increased focus on specificity and granularity also enhances the importance of both documentation improvement and quality checks.

“The key here is severity,” she says. “It’s not enough anymore to only document a generic diagnosis. Both the ICD-10-CM classification system and the CY2024 CMS-HCC model are progressively emphasizing specificity and severity. Consequently, health care providers will need to engage more in continual education and undergo documentation audits to align with these evolving expectations.”

According to Bronnert, documentation needs are similar between v24 and v28 in that the importance of documenting conditions to the fullest clinical specificity remains key. The specificity captures the complexity of a patient population and provides CMS with coded data for future analysis in model recommendations. As such, it’s important to continue documenting against the MEAT (monitoring, evaluation, assessment, treatment) criteria, which are the four factors that establish the presence of a diagnosis during a patient visit and ensure proper documentation.

Further, she says, the staged transition means providers will be reimbursed under two different models until v28 is fully implemented based on both the date of service and the percentage of the new model that has been deployed.

“Providers are going to have to be aware of the two versions coming into play [and] realistically, they’ll be managing these two versions for three years,” Bronnert says. “That’s why I say that, fundamentally, those conditions need to continue following MEAT documentation [guidelines].”

“Regardless of the condition, she adds, “it’s so important to keep documenting them because CMS does use the coded data as well as expenditures in the analysis [used] to make changes or revisions to their models.”

Documentation Tools
The impact of HCC v28 won’t be felt by only those responsible for documentation on the provider side. Technology vendors that provide computer-assisted coding (CAC), CDI, and other HIM technologies must also ensure their tools are equipped to support the dual HCC v24-v28 environment.

“While there are many similarities, there are also a lot of differences in some conditions, like angina. In version 24, it’s considered an HCC, but in version 28, unspecified angina is not,” Bronnert says. “The technology solutions will need to account for model differences.”

According to Youmans, the additional emphasis on specificity and severity means CDI and CAC systems must be capable of capturing and analyzing more detailed clinical data to support accurate coding and documentation under HCC v28. As such, “Data analytics capabilities of these technologies may need to be enhanced to meet these requirements as well,” she says.

Prescott further notes that while CDI, CAC, and similar technology tools do help identify which diagnoses have an impact on HCC risk adjustment, their purpose is to capture all appropriate diagnoses with related specificity that affect an encounter—not just HCCs. However, “If the software is directed toward HCC capture alone, I would suspect more prompts or identification of those opportunities to capture the needed specificity,” she says.

Proactive Preparations
There are steps provider organizations should be taking to prepare for the transition to HCC v28 and the need to operate in a dual HCC environment for the next few years. Bronnert suggests starting with an internal analysis to better gauge the transition’s impact “because each provider organization is going to have some variation on the actual diagnoses or conditions that affect them. Being aware of those differences and doing some analysis that’s specific to their patient population could help them prepare.”

Additionally, she recommends creating policies and procedures that include best practices related to problem list management and monitoring performance. Additionally, set timelines for documentation reviews to ensure the standards pertaining to MEAT are being met.

Prescott recommends targeting conditions for which the needed increased specificity will influence HCC assignments, such as heart failure or neoplasms, and conducting audits to identify opportunities to obtain increased specificity—information that can be used to identify missed opportunities and to provide targeted education to physicians, CDI, and coding professionals.

“I would also suggest you seek information from the MCR Advantage plans that your organization contracts with, she says. They could assist with identifying those areas for which there are opportunities for improvement. But there’s also information out there that requires no cost, just your time and research. I suggest people go to the source,” she says, pointing to the plethora of information and resources available from CMS, technology vendors, and education and consulting firms.

A good starting point is CMS’s announcement for calendar year 2024 MA capitation rates and payment policies, which contains the relative factor tables (page 183) and the HCC drop list (page 195). The ICD-10-CM mappings are also available.

“To educate myself, I spent time deeply immersed in the ICD-10-CM mappings and the hierarchies. It’s important to understand how the needed specificity is differentiated between the hierarchies. This allowed me to identify those areas for which one might need to focus their efforts,” Prescott says. “Utilize this information to run comparisons; for example, take existing documentation, compute the risk score utilizing both versions and compare the results, asking where did you come up short in v28? Was there needed documentation? Where were the opportunities?” she adds.

Finally, Prescott notes, providers in the outpatient setting will require more direction than will their inpatient counterparts, who benefit from years of CDI efforts to increase documentation and coding specificity.

“Heart failure is a perfect example, she says. “With v24, capture of ‘heart failure unspecified’ fulfilled the requirement for HCC capture. There was no need to capture the type or the status of the heart failure.” In the outpatient setting, Prescott concludes, providers within the outpatient setting will require increased education on the purpose of risk adjustment—“the why and how their documentation will allow capture of the patient’s true complexity.”

— Elizabeth S. Goar is a freelance health care writer based in Wisconsin.