Risk Adjusted Diagnosis Coding:

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1 Risk Adjusted Diagnosis Coding: Reporting ChronicDisease for Population Health Management Jeri Leong, R.N., CPC, CPC-H, CPMA, CPC-I Executive Director 1 Learning Objectives Explain the concept Medicare Risk Adjustment and HCC coding Emphasize the importance of coding to the highest degree of specificity to ensure all chronic conditions are accurately captured Identify potential compliance issues related to reporting HCC codes Illustrate the concept of management, evaluation, assessment and treatment ( MEAT ) Discuss why risk adjusted coding is important in the Patient Centered Medical Home model 2 Terminology HCC - Hierarchical Condition Categories Categories containing chronic condition diagnoses used to create a risk adjustment methodology; there is a hierarchy which ranks severity of illness CMS Centers for Medicare & Medicaid Services Medicare Advantage (Managed Medicare or Medicare Part C) A method ofhelping CMS budget for the cost of caring for populations of patients RAF-Risk Adjustment Factor Assessing the acuity of illness based upon reported ICD-9 codes & demographics Average RAF for adults is 1.0 Each.01 increase in RAF results in 1% higher reimbursement to the Medicare Advantage Plan from CMS 3 1

2 History of Risk Adjustment In 1997, beneficiaries begin choosing between traditional Medicare and managed Medicare plans Managed Medicare companies are given a fixed dollar amount per enrollee from CMS Enrollees may have additional benefits with managed Medicare companies Since 2007, the managed Medicare companies receive payments based on the HCC diagnoses assigned to each enrollee, plus demographic factor = the Risk Adjustment Factor (RAF) There are approximately 3000 diagnosis codes in about 80 HCC categories 4 Risk Adjustment Data Capture Risk adjusted payments are based upon acuity of diagnosis Sicker patients will utilize more resources MC managed care plans depend upon accurate diagnoses to ensure appropriate dollars are available to care for each enrolled beneficiary Diagnoses must be reestablished each year to ensure that next year s payments will cover costs. Documentation must support the diagnoses that are reported Payment is made to the Medicare Advantage Plan, not directly to the individual provider 5 Data Capture Cycle and Risk Adjustment Risk Adjustment: $5 million needed to manage chronic disease CMS Medicare Part C Plan Medicare Part C Plan $1 million in initial reserve Severity of illness is reported = More complex patients Provider Patient Encounter (diagnostic data) 6 2

3 Why Is It Important for Providers? Medicare Advantage, as an alternative to traditional Medicare, covers 13 million beneficiaries, or 27 percent of the people in the federal healthcare program for the elderly In theory, the CMS-HCC model pays more accurately for predicted health expenditures, based on health status and some demographic factors Guidance issued in April 2014 by CMS calls for future payment reductions ranging from 1.9 percent to 3.65 percent in rates paid to privately run Medicare plans Accurate data and appropriate risk adjustment ensures Medicare Advantage plans are available for patients Other insurance plans becoming available through the Affordable Care Act health exchanges will also use HCCs or another form of risk-adjusted payment 7 Pay-For-Performance Measures Pay-for-performance programs are rapidly expanding Programs consist of a differential payment to hospitals and other providers based on the performance of a set of specified measures Measures may relate to quality of patient care, clinical outcomes, efficiency, patient satisfaction, or structural reforms (such as implementation of EHR) Pay-for-performance programs align financial incentives with delivery of high-quality care Clinical-based measures are supported by accurate diagnosis coding 8 Risk Adjustment: How Does It Work? 9 3

4 An 80 year old female Medicare beneficiary is an alcoholic resulting in cirrhosis of the liver, ESRD and is on dialysis. The only reported diagnosis is ESRD. DOCUMENTED DX HCC VALUE ACUTAL CONDITION HCC VALUE Medicare/Age Base Rate (2013) $ V Medicare/Age MRA score before audit MRA score after audit PMPM before audit $ PMPM after audit $2, year old man on Medicaid has DM with CKD 3, CHF and emphysema. The only diagnoses reported are Diabetes and COPD. DOCUMENTED DX HCC VALUE ACUTAL CONDITION HCC VALUE Medicaid/Age Disease Interaction Medicaid/Age Disease Interaction Base Rate (2013) $ MRA score before audit MRA score after audit 3.00 PMPM before audit $1, PMPM after audit $2, Compliance Issues 12 4

5 13 Advantage Plan Participant Guide Excerpt 14 Coding Clinic, 3rd Quarter, 2007 Chronic Conditions Chronic conditions such as, but not limited to, hypertension, Parkinson s disease, COPD, and diabetes mellitus are chronic systemic diseases that ordinarily should be coded even in the absence of documented intervention or further evaluation. Some chronic conditions affect the patient for the rest of his or her life and almost always require some form of continuous clinical evaluation or monitoring during hospitalization 15 5

6 Monitor, Evaluate, Assess, Treat MEAT Diagnoses submitted from a face-to-face encounter; must indicate how the conditions are being treated, managed or assessed Every diagnosis reported as an active chronic condition must be documented with an assessment and plan of care, reflecting that the provider is applying the concept of MEAT Monitor signs, symptoms, disease progression, disease regression Evaluate test results, medication effectiveness, response to treatment Assess ordering tests, discussion, review records, counseling Treat medications, therapies, other modalities Simply listing a diagnosis in the medical record does not support reporting an HCC code 16 Documentation and Data Capture Problem lists should be reviewed and updated at regular intervals Report ALL existing chronic disease processes via claims at least once per calendar year Annual Wellness Visit (including Personalized Prevention Plan) is an option that may enable providers to systematically review and capture pertinent diagnostic information annually 17 Risk Adjustment: Not Just for Medicare 18 6

7 Chronically Ill Children - The Patient Centered Medical Home The general concept of PCMH was introduced by the American Academy of Pediatrics in 1967; known then as the medical home The model has evolved into an operational model including coordinated and integrated care emphasizing shared information Nationwide, 13% of children have special health care needs Obtaining adequate reimbursement for additional services associated with caring for these patients is essential Payment is moving toward recognition of case mix differences in the patient population, derived from diagnostic information 19 Chronically Ill Children - Special Health Needs Services are reported by the physician or qualified health care professional who manages and coordinates medical, psychosocial and daily living needs of pediatric patients with chronic medical conditions Defined as: Receiving three or more therapeutic interventions (e.g., meds, therapy, nutrition) Two or more chronic continuous or episodic health conditions expected to last at least twelve months, placing the patient at significant risk of death, acute exacerbation or decompensation, or functional decline Typically requires coordination of several specialists and/or services Capturing data enables payers and government agencies to accurately predict expenditures 20 Sample Compensation Model: PCMH Proposed Medical Home Demonstration per member per month payment rates, overall and by HCC score Medical Home Tier Per member Per Month Payments Patients With HCC Score <1.6 Tier 1 $40.40 $27.12 $80.25 Tier 2 $51.70 $35.48 $ Patients WithHCC score =1.6 Fees are adjusted using HCC codes to reflect severity and burden to the physician HCC scores <1.6 represent beneficiaries who are less ill and require less physician resources to manage. Those with scores >1.6 are considered more ill and require more physician resources to manage the patient 21 7

8 What s On the Horizon? 22 Complex Chronic Care Coordination Effective January 1, 2015 CMS plans to start reimbursing providers to coordinate the care of beneficiaries with chronic diseases Patient must have two or more chronic conditions, such as depression, heart disease or diabetes Health care providers receiving compensation must develop a comprehensive plan, including; Assessing patient s medical, psychological and social needs Ensure patients adhere to medications Monitoring care by other providers Arrange for streamlined transition when patients move from one facility to another 23 Next Steps Familiarize providers and support staff with the concept of riskadjusted diagnosis coding Audit medical records to identify patients with chronic conditions Conduct internal training for providers explaining documentation requirements to support reporting conditions that are being monitored or evaluated Capture diagnostic information annually Report claim data accurately Prepare for reporting Complex Chronic Care Coordination in

9 Mahalo! Jeri Leong, R.N., CPC, CPC-H, CPMA Healthcare Coding Consultants of Hawaii, LLC

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