As the environment continues its shift toward value-based reimbursement, accurate Hierarchical Condition Category (HCC) coding has become increasingly important. While HCCs enable Medicare Advantage (MA) plans and provider organizations to receive appropriate reimbursement for managing patients with complex chronic conditions, reporting diagnoses that are not supported by the medical record are starting to expose organizations to significant financial, legal, and reputational risk.
Background - Unsupported HCC Categories
As a way of background, an unsupported HCC diagnosis occurs when a condition reported for risk adjustment lacks sufficient clinical evidence, is not actively managed, or is not adequately documented by the treating provider. Common examples include:
Reporting historical conditions as active, i.e.: Stroke (HCC) vs history of stroke (non HCC)
Carrying diagnoses forward without validation of current relevance
Adding diagnoses retrospectively without supporting documentation
Coding conditions that were not Monitored, Evaluated, Assessed, or Treated during the encounter, otherwise known as “MEAT” criteria, which correlates with coding guidelines for Additional Diagnoses
CURRENT ENVIRONMENT - INCREASED REGULATORY SCRUTINY
Recent enforcement actions demonstrate that federal regulators are closely scrutinizing risk-adjustment coding practices. Within the past month, the Office of Inspector General (OIG) announced settlements with three healthcare organizations for allegedly submitting unsupported diagnosis codes that increased MA risk scores and payments.
The largest settlement involved The Villages Health System, which agreed to pay $541.5 million after self-disclosing unsupported diagnoses submitted to MA organizations. According to the report, diagnosis codes were added through retrospective documentation processes which had lacked adequate clinical support and/or were appended up to six months after a patient visit within the Electronic Health Record (EHR).
The OIG report also provided insight into the OIG’s audit approach that will assist Revenue Integrity and Compliance teams as they evaluate HCC coding. Specifically, the OIG stated that "diagnoses must be supported by the medical record from a face-to-face visit between a patient and a provider, and for outpatient visits, must have required or affected patient care, treatment, or management at the visit".
Additional settlements included Monogram Health and Complete Health, both involving allegations that unsupported diagnoses were reported for MA risk adjustment purposes.
These cases all reflect a growing enforcement trend signifying that unlike previous settlements, government scrutiny is no longer limited to health plans. Additionally, as hospitals, physician practices, clinically integrated networks and value-based care organizations are incorporating processes to evaluate HCC coding, it’s vital to establish internal protocols to monitor those processes to ensure the accuracy of the diagnoses documented and submitted.
Importantly, and beyond the financial and regulatory concerns, inaccurate diagnoses can also compromise patient care since unsupported conditions may clutter problem lists, distort quality metrics, influence treatment decisions, and create an inaccurate picture of a patient's health status and/or incongruency within the EHR.
Next Steps - Mitigating Risk
The good news is that healthcare organizations can reduce risk by focusing on documentation integrity rather than just volume. From a “best practice” perspective, facilitating routine HCC audits, conducting provider education emphasizing strong clinical documentation improvement and developing appropriate query processes will assist providers foster a culture in which documentation and the assigned diagnosis codes are aligned, promoting high quality patient care. And with the latest OIG settlement, HCC documentation integrity is not merely a coding issue, but is also an important compliance oversight initiative.
SunStone Consulting offers comprehensive services geared to help hospitals, health systems and providers evaluate and navigate the ever-changing regulatory environment. If you have any questions, please contact Vonda Moon, Senior Principal at vondamoon@sunstoneconsulting.com, Joli Fitzgibbons, Senior Director at jolifitzgibbons@sunstoneconsulting.com or Laura Ehrlich, Senior Clinical Specailist at lauraehrlich@sunstoneconsulting.com.