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Population health's financial imperative for HCC improvement and 3 opportunities to get there

October 2, 2018

    Coding and documentation (e.g., ICD-10 codes) are important under value-based reimbursement models. They inform Hierarchical Condition Categories (HCCs), a measure of disease burden, and Risk Adjustment Factors (RAFs). Physicians do most coding and can help ensure provider organizations are accurately reimbursed and held to fair standards in risk-based contracts.

    Explore 3 opportunities to optimize HCC capture

    Accurate HCC capture critical under value-based reimbursement models

    Stakeholders of high performing ACOs understand the three major consequences they face if HCCs underrepresent disease burden:

    • Aggregated codes will not capture the full risk burden and expected costs of beneficiaries;
    • RAFs, financial benchmarks, and per member per month payments will all be lower; and
    • Quality benchmarks will be more difficult to achieve in shared savings programs.

    Physician education, coding support, and ongoing incentive structures improve HCC capture

    Here are three ways to improve ICD diagnostic coding to optimize HCC capture:

    1. Target physician education on importance of HCC coding: System leadership taking on staff education around ICD-10 documentation must make a direct link between improved coding efforts, the closure of clinical care gaps, and financial impacts. Kettering Physician Network (KPN) provided didactic and practical education around HCC capture to primary care and specialty physicians. Within four months of launching its education program, KPN improved HCC capture across their network by 31%.

    2. Provide physicians with coding support: Accurate HCC capture requires significant time investment. At a minimum, health systems should develop a simple, easily-accessible resource featuring high-impact, often incorrectly coded, diagnosis codes to help physicians be more thoughtful about documentation. To maximize outcomes, advanced provider organizations invest in real-time analytic staff or technology-based coding support. Allina Health invested in coding support resources, increasing RAF scores by 10% and improving challenging diagnoses codes by 72%.

    3. Give physicians ongoing incentives to accurately code: Provider organizations financially incentivize improved HCC capture by tying a portion of physician compensation to accurate capture of disease burden or offering "pay-as-you-go" programs that reward incremental coding improvement. However, financial incentives are often only short-term solutions. Summit Medical Group financially incentivized physicians for one year. Today, they use performance transparency to spur friendly competition among providers to achieve documentation thresholds. They see year-over-year improvements in prior year chronic HCCs submitted.

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