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THE IMPORTANCE OF HIERARCHICAL CONDITION CATEGORIES (HCC)
Effective January 1, 2004, CMS implemented a risk adjustment model in which reimbursement to Medicare
Advantage organizations such as Bravo Health is based on hospital inpatient, hospital outpatient, and
office-based Provider encounter data. This model predicts health cost expenditures by calculating the
disease burden of the population. A Member’s risk is measured by assessing the diagnostic characteristics
(ICD-9) of the Member, rather than assessing what treatments (CPT) they have received.
Provider must document the Member’s conditions and diseases accurately using ICD-9 codes and extend to
the fifth digit where appropriate. This is particularly true for high-risk conditions where co-morbidities
make a significant difference in risk scoring. Diabetes is a perfect example of where ICD-9 code 250 is not
enough to establish the extent of diabetic complications such as neuropathy, blindness and vascular disease.
Chronic conditions must be documented at least once a year to ensure correct risk stratification of the
Member.
Ensure that all diagnosis codes are transferred to the CMS 1500 claim form when billing. For complicated
cases, this may require additional CMS 1500 forms to document more than four diagnoses.
It is important that you document the diagnosis clearly and update the Member’s problem list with each
encounter. Even visits for minor conditions in patients with persistent conditions should be first coded with
the conditions for which the patient is seen and second with accurate co-morbid codes for persistent
conditions like diabetes and CHF. This will ensure that we capture accurate information on your patients
annually. The Member’s name should be recorded on each page of the medical record and the physician
should sign and date each entry.
To meet CMS requirements and to initiate the risk adjustment chart and case management review process,
Bravo Health requires your cooperation in providing access to office medical records. On a regular basis,
you will receive written notification from Bravo Health requesting a chart audit. Please be assured that we
will conduct these audits efficiently and professionally with minimal disruption to your office workflow. In
addition, our certified coders or nurse coders will be glad to come to your office to work with you and/or
your staff to resolve any coding issues that may arise.
