Englewood Health Physician Network, Quality and Population Health

The Importance of Proper HCC Coding

The Hierarchical Condition Category (HCC) risk adjustment scoring model is used by CMS and other payers to estimate the annual healthcare costs for beneficiaries, whether in Traditional Medicare or Medicare Advantage programs. The results directly impact the reimbursement to the health system.

HCC scoring assigns a Risk Adjustment Factor (RAF) score to each diagnosis code a provider documents for a patient as a measurement of probable costs. The HCC score is then used to adjust payments for patients enrolled in Medicare (type) plans. The higher the HCC score of a patient, the more we get paid for taking care of the patient. The higher HCC score also adjusts our benchmark for our value-based and risk-based payer programs, which affects our shared savings performance. Due to the impact of HCC scores on our overall reimbursement, it is important to remember that they reset every year, so proper coding of chronic and permanent conditions must be a focus at every visit.

See below for examples of how you can learn to code more accurately.