This Medscape piece by Greg A. Hood, M.D., looks at the need for providers to better understand the income implications of the new ICD-10 codes as they relate to hierarchical condition categories (HCCs).
Dr. Hood notes:
“HCC codes have been affecting insurance products and physician reimbursements for years, though most clinicians have under-appreciated them at best or more plainly ignored them. They’ve been a cornerstone of` reimbursement for Medicare Advantage plans for over a decade.
“Because HCCs, which are gathered from encounter claims data, are used to estimate predicted costs for plan members in the year to come, they’re integral in calculating benchmarks for (ACOs) as well as for the hospital value-based purchasing program.”
He goes on:
“CMS and other insurers that incorporate HCC methodology into reimbursement will probably exclude codes that lack the relative degree of specificity achievable with many ICD-10 codes. This means that providers will probably be unable to avoid coding in extreme … detail. It’s important to note that the ICD-10 codes that do venture into highly detailed specificity do not necessarily connote a meaningful HCC score. In other words, it’s not the degree of detail that predicts expenses, but rather the severity of the condition represented by the diagnosis code.”