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Hierarchical Condition Categories 2017 Linda Poulos CPC CPCI Barbara Johansen MSN, RN, CPC, CRC Life Insurance Actuarial Science: Influence on HCC Risk Adjustment Congressional Acts Passed for Implementation of Risk Adjustment The HCC Model Basics: Categories, Hierarchy, RAF, Co-Morbidities Risk Adjustment Coding, Documentation, Compliance, CMS RADV Audit Organization of the HCC Model Based on 10 Principles HCC Model Changes Over the Years 2017 CMS Final Call Letter on Risk Adjustment Full Encounter Data for Risk Adjustment by 2020 Managed Care Organizations’ 5 Star Program Medicare Chronic Care Initiatives Congressional MACRA ACT: Movement Away from FFS, Quality versus Quantity Questions and Discussion Life Insurance Industry’s Influence on HCC Risk Adjustment Original Concept of Risk Adjustment HCC Model: Implemented in 2004 What was it based on? Let’s Understand The Concept of “Risk Adjustment” “Risky Business” The concept long applied in the insurance industry “Risk Adjustment” is a fundamental component of actuarial science “Defines Categories of Individuals Who Face Similar Risks For Some Insurable Risk” “Medicare’s Use of Risk Adjustment” Gerald F Kominski, PHD Consultant 8/21/07 National Health Policy Forum George Washington University Age Gender Health Status- Presence of Chronic Disease or Behavior Indicators ex: cigarette smoking Actuarial life tables quantify the relationship between risk factors and the probability of dying (insurable loss) during a particular time period…such as the next 12 months Result: Life Insurance Premium Medicare is one of the world’s largest provider of Health Care…..Annual budget is in the billions….. Provides Health coverage to over 40 million beneficiaries “entitled” Elderly age Disability ESRD 1. Traditional Fee For Service (FFS) “Straight” Medicare Patient (billed per visit) 2. M + C (Medicare + Managed Care) Private Health Care Plans ex: SCAN **Medicare pays managed care plans a monthly “capitated” rate to take care of their members Guess What It Is Based On ??!! Historically…Medicare paid managed care organizations “expenditures” based on.. Geographic Area (County: Adjusted Average Per Capita Cost) Age Sex Medicaid Enrollment (indicating economic need) Separate County factors for: Disabled Both over 65 yrs. (aged) and under 65 yrs. End Stage Renal Failure Entitled This methodology (AAPCC) explained only about 1% of the variation in expenditures for caring for these Medicare beneficiaries Not everything was equal It Did Not Pay “Differently” for the sicker the patients were “Research showed that the Medicare program expenditures to “managed care groups” was increasing because their enrollees were healthier than the FFS enrollees….and the county AAPCC approach did not account for this favorable selection” Risk Adjustment of Medicare Capitation Pay Using the CMS-HCC Model Greg Pope et al 2004 Health Care Finance Review Congressional Acts Passed for Implementation of HCC Risk Adjustment United States Congress passes…. “Mandated the implementation of accurate payment to Medicare Managed Care organizations based on risk adjustment methodology…incorporating this by 2000 “Health Status” Start of HCC!! 1998….To support this congressional mandate…”managed care organizations” were required to report inpatient data (hospital) diagnoses 2000….Medicare implemented the PIP- DCG model to support hospital data submission: Principal Inpatient Primary Dx. Diagnostic Related Cost Group This model was the result of a 20 year research project by Boston University & Health Care Economics….funded by CMS. Estimates cost for following year from inpatient data Major Model Shortcoming Only illnesses that result in hospital admissions are counted? This limited the information on the “health status” of each member because the majority of members were seen more frequently in the ambulatory care setting SO……. Benefits Improvement & Protection Act Mandates Ambulatory Data be submitted by “Managed Health Care Organizations” in addition to hospital data To accomplish this Medicare selected the HCC Risk Adjustment Payment Model *This is a simplified version of Diagnostic Related Group Cost Model 2004 Implementation of the HCC Risk Adjustment Model for ambulatory care! It incorporated inpatient hospital, outpatient hospital, and physician encounters in predicting “cost of care”. It was phased in gradually over four years from 2004-2007 (30%,50%75%100%) 2007- 100% of payment to Medicare Advantage Plans was now based on the CMSHCC Model for diagnostic health status reporting Basic Structure of the CMS Risk Adjustment Model Reimbursement is higher for sicker patients and lower for healthy patients. The patient’s health status is re-determined each year. Outreach efforts and patient visits are extremely important. Risk Adjustment is based on diagnoses reported through claims (encounter data) with high importance on assessing, documenting and coding all conditions at each visit. Physicians, NP, PA are vital to submitting Risk Adjustment Codes (HCC’s) Hierarchical Condition Category • “Additive” Model Includes all qualifying diagnoses • “Prospective” Model 2017 payment based on 2016 Dates-of-Service “Categories”: Similar conditions, or Similar cost of treatment Have the same value (Risk Adjustment Factor) Adjusts payments based on health status • Chart documentation and diagnostic coding are “Key” to Risk Adjustment • Health status is re-determined each calendar year Risk Adjustment Model 8,830 ICD-10 HCC’s 79 HCC Categories Individual Patient RAF SCORE The Total RAF Score is based on: 1. Demographics: Age & Gender 2. Additional Demographic risk factors are added for Medicaid status & if patient was eligible for Medicare due to a Disability 3. Diagnoses: Total of all Chronic Conditions and Disease Interactions reported in a given year Arranged by similar disease process Ex: infection Similar Body System Ex: cardiac Single Disease Entity Ex: polyneuropathy *Diagnoses are grouped clinically and are related cost of care for these conditions to the HCC Disease Group Hierarchy 8 Metastatic CA Acute Leukemia 9,10 9 Lung and other Severe Cancers 10,11,12 10 Lymphoma and other Cancers 11,12 11 Colon, Bladder, Other 12 12 Breast, Prostate, Other Tumors 17 Diabetes Acute Complications 18,19 18 Diabetes with Chronic Comp. 19 19 Diabetes without Comp. Drop Associated Below Interaction Chronic Conditions INT 1 Cancer & Immunity INT 2 CHF & Diabetes INT 3 CHF & COPD INT 4 CHF & Renal INT 5 CHF & Heart Arrhythmias INT 6 COPD & Cardio Resp. Failure **CMS applies extra risk points at the end of the year for disease interactions Guidelines for Supportive Documentation and Coding in Risk Adjustment Proper documentation is essential to reimbursement! Diagnostic Coding helps drive the RAF scores RAF scores drive the reimbursement ICD-10-CM: Diagnostic Coding and Reporting Guidelines for Outpatient Services Code for the diagnosis, condition, problem or other reason for encounter/visit. List first the ICD-10-CM Code for the diagnosis, condition, problem, or other reason for encounter/visit shown in the medical record to be chiefly responsible for the services provided. List additional codes that describe any coexisting conditions. In some cases the first-listed diagnosis may be a symptom when a diagnosis has not been established (confirmed) by the physicians Code all documented conditions that coexist. Code all documented conditions that coexist at the time of the encounter/visit and require or affect patient care treatment or management. Do not code conditions that were previously treated and no longer exist. However, history codes may be used as secondary codes if the historical condition or family history has an impact on current care or influences treatment. Co-Existing and Related Conditions CMS recommends the official coding guidelines from ICD-10-CM published at www.cdc.gov/nchs/icd10.htm and the Coding Clinic publications (AHA) as the best guidance for risk adjustment diagnostic coding. Co-Existing conditions include chronic ongoing conditions such as diabetes (HCC 17-19), Congestive Heart Failure (HCC 85), atrial fibrillation (HCC 96), , Chronic Obstructive Pulmonary Disease (HCC 111). These diseases are generally managed by ongoing medication and have the potential for acute exacerbations if not treated properly, particularly if the patient is experiencing other acute conditions. It is likely that these diagnoses would be part of a general overview of the patient’s health when treating coexisting conditions for all but the most minor of medical encounters. Co-Existing conditions also include ongoing conditions such as Multiple Sclerosis (HCC 77), Hemiplegia (HCC 103), All Conditions Coded Appropriately Some Conditions Coded Low Level of Specificity 0.457 No Conditions Coded 0.457 76 year old female Medicaid status 0.131 Medicaid status 0.131 Medicaid status 0.131 0.508 Diabetes w/o complications (HCC 19) 0.162 No diabetes coded X 0.316 No vascular disease coded X Diabetes w/ vascular complications (HCC 15) Vascular disease w/ complications (HCC 104) 0.610 Vascular disease w/o complications (HCC 104) 76 year old female 0.457 76 year old female CHF (HCC 80) 0.410 CHF not coded X CHF not coded X Disease Interaction (DM + CHF) 0.154 No Disease Interaction X No Disease Interaction X Total RAF 2.27 Total RAF 1.066 Total RAF 0.588 PMPM Payment $2,205 PMPM Payment $1,035 PMPM Payment $571 Annual Payment $26,460 Annual Payment $12,420 Annual Payment $6,852 Documentation: In the face-to-face visit note has the medical condition been: Monitored Evaluated Addressed/Assessed Treated The medical record must thoroughly document all conditions evaluated and reported. Evaluative documentation would include statements such as: Stable on meds Condition worsening – medication adjusted Tests ordered – documentation reviewed Condition improving Acuity- acute, chronic, intermittent Severity- mild, moderate, severe Etiology- trauma, diabetes, renal failure, exercise or infection induced Location- where is it- be specific about which joint, chest, femur, posterior thorax Laterality- which side is it? Left, right, both? Detail: Present on admission status, associated symptoms (hypoxia, loss of consciousness), additional medical diagnoses, initial versus subsequent encounter Basic Chart Documentation Requirements The physician’s signature and credentials must be on each chart entry as a condition of payment from CMS. The patient’s name and the date of service must be on each page of the patient chart. The medical record must be completed and legible. Only standard medical abbreviations should be used. The medical record must support all diagnoses coded for the date of service and must be able to stand alone for audit on reported diagnosis codes. Risk Adjustment Data Validation Audits Compliance Supportive Documentation for reported diagnostic codes Auditing Endeavors-Physician Education Increase in yearly RADV audits by CMS using outside contracted companies similar to the current RAC audit program The structure of the HCC Model is based on 10 principles to guarantee flexibility and longevity 1. Diagnostic categories should be clinically meaningful…have a set of ICD10 codes that relate to specified disease or medical conditions: Ex: HCC 108 Vascular Disease I71.9 Abdominal Aneurysm without rupture I70.201 Atherosclerosis of native arteries of extremities, rt leg I70.90 Unspecified Atherosclerosis, PVD 2. Diagnostic HCC Categories should predict medical expenditures….and diagnoses should be reasonably homogeneous with respect to the effect on cost Ex: Diabetes HCC 19 E11.9 Type II diabetes mellitus without complications HCC 18 E11.40 Type II diabetes with diabetic neuropathy 3. Diagnostic categories should have adequate sample size to permit accurate & stable estimate of expenditures Example Sufficient # of codes under each HCC Category All 8,830 ICD HCC codes are mapped under 79 HCC categories The HCC Model is not meant to be an all Inclusive model for chronic illness 4. In creating an individual clinical profile (HCC RAF Score), hierarchies should be used to characterize the person’s illness level (acuity)within these disease conditions per HCC Category Ex: Each new problem adds to a patient’s total score (disease burden) The more severe manifestation of a given disease condition reported during the year defines the impact on cost (trumps the lower) 5. The diagnostic classification should encourage and reflect more specific coding: Example: Generalized diagnostic codes grouped under less severe or lower paying diagnostic HCC Categories General Category- G20 HCC 32 Parkinson’s Disease Specific Category- I70.241 HCC 107 Atherosclerosis Of native arteries of left leg with ulceration of thigh 6. The diagnostic classification does not reward coding proliferation from a financial standpoint. Example: Assessing and reporting the same condition several times in a given year (E11.9 Diabetes Type II uncomplicated)…does not mean reimbursement is calculated on the number of times reported… E11.9….E11.9…..E11.9…..E11.9…..E11.9 7. Providers should not be penalized for reporting the same diagnoses many times during the year. Ex: No penalty for submitting the same codes continuously…”the more codes the better“ “Better to report more…than under-report conditions” 8. The classification system should be internally consistent when placing new codes within the risk adjustment model Ex: Each year new codes are added to the model….therefore the classification system for placing these codes within the model should be consistent with the structure of the hierarchy…based on cost of care for related conditions ** CMS deletes codes from the model also! 9. HCC Diagnostic Categories should provide assignment ability of all ICD-10-CM codes to the HCC Risk Adjustment Model. Example: When codes are added…the model should be able to place any ICD-10 under one of the established HCC categories 10. Ambiguous diagnostic categories should be excluded from the payment model Example Each category should be explicit in its description without room for “interpretation or confusion” Headings are descriptive for the conditions listed within them Example: Renal Failure HCC 131 The HCC Model has changed over the years…..the biggest change happened in 2014 PY (Payment Year) Payment Years: 2004-2013 (2003-2012 DOS) HCC V12 Model maintained the Same Design 70 Categories, Average of 3000 risk adjusted codes. Payment Year 2014 (2013 Dates-of-Service) New V22 of HCC Model, rearranged HCC’s, New Category Headings (79), codes moved around, additions and deletions, uproar by Healthcare, CMS settled on a blended model: 25% V12 /75% V22 Payment Year 2015 (2014 Dates-of-Service) CMS settled on blended model of 67% V12/33% V22 Payment Year 2016 (2015 Dates-of-Service), 100% V22 Model, ICD-10 begins 10-1-2015. Payment Year 2017 (2016 Dates-of-Service), introduces six member groupings for risk adjustment, Medicaid eligible incorporated into a grouping, complexity added to HCC “CMS introduces six member categories to the HCC Model for 2016 Dates-of-Service in an effort to provide more accurate payment for differences in risk adjustment health status” Gorman Consultant Group “White Paper” April 2016 “CMS finalized its new risk adjustment model that will include separate coefficients for partial benefit dual-eligible beneficiaries, full benefit dual-eligible beneficiaries and nondual-eligible beneficiaries: Risk Scores will be calculated separately for the following community groups: 1. Non-dual aged 2. Full benefit dual aged 3. Partial benefit dual aged 4. Non-dual disabled 5. Full benefit dual disabled 6. Partial benefit dual disabled *This will correct two problems with the current HCC Model, underPayment of full dual-eligible and underpayment of those at high cost end CMS plans to move away from the RAPS format for HCC data submission to full encounter data submission by 2020 Encounter Data System (EDS) will eventually replace the original Risk Adjustment Processing System (RAPS) and FFS for submission of HCC Conditions by 2020. Rational: Too expensive to run two programs! Blend Transition slowly over several years: 2016 Payment Year- (2015 Dates-of-Service)- 90% RAPS/FFS 10% EDS/FFS 2017 Payment Year- (2016 Dates-of-Service)- 75% RAPS/FFS 25% EDS/FFS **As the industry shifts to value-based payments encounter data will become a heavily weighted variable in the equation for determining payments for provider risk scores RAPS Submission of HCC Diagnoses to CMS Since 2004 Face-To-Face E&M CPT Practitioner Name Patient Name Date-of-Service Diagnostic Codes Full Encounter Data Submission of HCC DX to CMS Complete Invoice Information All CPT Codes for Face-to-Face E&M Visit CMS mandates a point system (Report Card) for rating the effectiveness of Managed Care Health organizations in providing quality care to their members and providing consumer awareness. Domain I: Staying Healthy-Screening Tests and Vaccines: Adult BMI Assessment Breast Cancer Screening Glaucoma Screening Annual Influenza Vaccine Pneumonia Vaccine Domain II: Managing Chronic Long-Term Conditions Comprehensive Diabetes Care Rheumatoid Disease Modifying Anti-Rheumatic Drug Therapy Management for Patients with Cardiovascular Conditions Controlling High Blood Pressure Osteoporosis Management in Woman After Fx Medication Management CMS initiates a Comprehensive Primary Care approach to managing chronic illness in the Medicare population! Rationale: TODAY, 133 MILLION AMERICANS- ONE THIRD OF THE TOTAL POPULATION-SUFFER FROM AT LEAST ONE CHRONIC DISEASE 70 PERCENT OF ALL DEATHS RESULT FROM “CHRONIC DISEASES” 85 PERCENT OF ALL HEALTHCARE DOLLARS GO TO TREATMENT OF CHRONIC DISEASES. MORE THAN TWO-THIRDS OF MEDICARE DOLLARS ARE SPENT ON PATIENTS WITH FIVE OR MORE DISEASES. SOLUTION: RESEARCH STUDIES HAVE DEMONSTRATED THAT CARE MANAGEMENT REDUCES TOTAL COSTS OF CARE FOR CHRONIC DISEASE PATIENTS WHILE IMPROVING THEIR OVERALL HEALTH. DESPITE THESE IMPRESSIVE RESULTS, PATIENTS RECEIVING CARE MANAGEMENT SERVICES REMAIN THE EXCEPTION, NOT THE RULE. THE RESULT: CHRONIC DISEASE PATIENTS ARE TOO OFTEN LEFT TO MANAGE FOR THEMSELVES BETWEEN EPISODES OF CARE. THAT PATTERN OF SPORADIC CARE TRANSLATES INTO HIGHER COMPLICATION RATES WHICH, IN TURN, MEANS MORE SUFFERING AND COSTLY CARE. NEW OPPORTUNITIES: THE CENTERS FOR MEDICARE & MEDICAID SERVICES (CMS) ACKNOWLEDGED THE ADDITIONAL WORK INVOLVED IN MANAGING A PATIENT FOLLOWING A HOSPITAL DISCHARGE WAS NOT COVERED BY EXISTING REIMBURSEMENT. CMS THEREFORE CREATED A NEW PAYMENT FOR TRANSITIONAL CARE MANAGEMENT (TCM). CPT Codes 99495 & 99496 NEW MEDICARE PAYMENT FOR CCM WITH THE PUBLICATION OF THE PROPOSED 2015 MEDICARE PHYSICIAN FEE SCHEDULE, CMS CONFIRMED ITS INTENT TO PAY FOR CHRONIC CARE MANAGEMENT, OR CCM, BEGINNING… JANUARY 1, 2015 CCM PAYMENTS WILL REIMBURSE PROVIDERS FOR FURNISHING SPECIFIED NON-FACE-TO-FACE SERVICES TO QUALIFIED BENEFICIARIES OVER A 30-DAY PERIOD. CMS DEFINES THE SCOPE OF CCM SERVICES TO INCLUDE ESSENTIAL ELEMENTS Regularly updated comprehensive patient centered plan of care (with copy to patient) Continuity of care through access to established care team for successive routine opportunities Regularly scheduled preventive services and medication monitoring 24/7 patient access to care team to address acute chronic care needs; 24/7 care team access to patient’s full electronic medical record Opportunity for patients to communicate with care team by telephone, secure messaging and other asynchronous communication modalities Management of care transitions facilitated by electronic exchange of health information Documented coordination with home and community-based providers required to support patient’s psychosocial needs and functional deficits ELIGIBLE FOR CCM- Beneficiaries diagnosed with 2+ chronic conditions expected to persist at least 12 months (or until death) that place individual at significant risk of death, acute exacerbation/decompensating, or functional decline. • • • • • • WHO CAN BILL- Physicians, advanced practice registered nurses, physician assistants, clinical nurse specialists, and certified nurse midwives., Other non-physician practitioners and limited-license practitioners are eligible BILLABLE CCM UNIT- CCM services may be billed once every 30 days provided that at least 20 minutes of non-face-to-face care management services are furnished during that time period. 20 MINUTE SERVICE- Time may be aggregated to total 20 minutes but if two persons are furnishing services at the same time, only the time spent by one individual may be counted. Time of less than 20 minutes over a 30 day period may not be rounded up to meet this requirement. ROLES OF STAFF- CMS states it would expect that the 20 minutes or more of CCM services to be provided by clinical staff be directed by a physician or other qualified healthcare professional. LEVEL OF SUPERVISION- To count toward the 20-minute requirement, clinical staff must furnish services consistent with the “incident to” requirements, except direct supervision (i.e. physician present in some suite of offices and immediately available to provide assistance or direction) is not required. Instead, the services may be provided under general supervision (no physical presence requirement). Such supervision may be provided by a physician other than the billing physician. ONLY ONE PROVIDER BILL- CMS will pay for only one claim for CCM per beneficiary for a 30 day period. CMS “movement” away from Medicare “Fee-ForService” reimbursement….focusing on performance improvement based on preventive measures, quality outcomes, and management of chronic illness *Quality versus Volume” Goals: 1. Strengthen primary care through multi-payer payment reform and care delivery transformation 2. Empower practices to provide comprehensive care that meets the needs of all patients 3. Improve quality of care, improve patients’ health, and spend health dollars more wisely Participants and Partners: 5 year model: 2017-2021 Up to 5,000 practices in up to 20 regions Two tracks depending on practice readiness for transformation and commitment to advanced care delivery for patient’s with complex needs Payment Redesign Components: PBPM risk-adjusted care management fees Performance-based incentive payments for quality, experience, and utilization measures that drive total cost down Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) On April 27, 2016, CMS published a highly anticipated Proposed Rule that makes significant changes to the way ambulatory care clinicians will be reimbursed by Medicare. Under the rule, payment “adjustments” to a provider’s Medicare reimbursement would begin in 2019, but those bonuses and penalties would be based on performance in 2017! This is Quality over Quantity Medicare Savings a multi-year pilot Shared program. Program Merit Based Payment MIPS Merit-Based Incentive Payment System Alternate Model Payment APMS Alternative Payment Models Incentives: Promote value-based payment systems Test new alternative payment models Increase linkage of Medicaid, Medicare FFS, and other payments to value Bring proven payment models to scale Care Delivery: Encourage the integration and coordination of services Improve population health Promote patient engagement through shared decision making Information: Create transparency on cost and quality information Bring electronic health information to the point of care for meaningful use ACO (Accountable Care Organization)- ACO’s are groups of clinicians, hospitals, and other health-care providers that choose to come together to deliver coordinated, high-quality care to the Medicare patients they serve Advance Payment ACO Model- The Advance Payment Model is providing upfront and monthly payments to 35 ACOs participating in the Medicare Shared Savings Program. The following qualify as “APM’s” in 2017: Medicare Shared Savings Program (Track 2) Medicare Shared Savings Program (Track 3) Next Generation ACO Model Comprehensive ESRD CARE (Large Dialysis Organization arrangement) Comprehensive Primary Care Plus (CPC+) Oncology Care Model Two-Sided Risk Arrangement (available in 2018) THANK YOU!! QUESTIONS?? 2017 CMS-HCC Model Updates and Implementation, July 2016 [email protected]. “Value-Based Care: CMS Priorities in Health System Transformation”, Ashby Wolfe, MD Chief Medical Officer, California, Centers for Medicare and Medicaid Services, ICE Conference, December 2016, San Francisco Quality Payment Program, https://qpp.coms.gov ‘The MACRA Proposed Rule on MIPS and APMs: Summary and Key Takeaways’, A White Paper, Impact Advisors LLC, May 2016 Medicare Shared Savings Program Final Rule Overview, June 2015, http://www.ecfr.gov/cgi-bin/retrieve “A Summary and Analysis of the Final Rate Announcement and 2017 call letter for Medicare Advantage Part D”, A White Paper, Gorman Health Group, April 2016 “CMS Risk Adjustment Payment Methodology: The Role of Physicians and supporting Staff”, Pam Holt, Secure Horizons by United Healthcare, 2006 Risk Adjustment: https:// www.cms.gov/MA/risk “Health Care Financing Review: Risk Adjustment for Medicare Capitation Payments Using the CMS HCC Model”, Pope et al, 2004 Summer