Oncology & Hematology Coding Alert

Correctly coding comorbidities can mean a difference of hundreds-or thousands- of reimbursement dollars for your practice.

Hierarchical condition categories (HCC) are one of several risk-adjusted payment models. This model is preferred by federal programs like Medicare, and private payers are following suit. This model uses demographic data and diagnosis codes to group patients with clinically similar patients in order to predict future healthcare costs. Demographics include age, gender, and eligibility. Older patients and those who are eligible for Medicaid are expected to have higher healthcare cost than a younger patient.

For the diagnosis component, the payer uses the diagnosis codes you list on claims for the past 12 months to predict what the next 12 months' expenses will be for that particular patient. Each diagnosis has a weight (some are zero), and a patient's total HCC score is calculated by adding the weights of each diagnosis to the patient's demographics. The total score is then used to determine a risk premium for that patient. This is the amount above or below the average Medicare cost per beneficiary you would be paid.

Key Formula: Patient HCC Score x Avg. Medicare Cost per Beneficiary = Projected Medicare Cost

Key Idea: If you accurately report a patient's comorbid conditions, your payer will expect to pay more for that patient. As a specialty, oncology patients tend to have higher HCC scores, according to Matthew Menendez, an HIT expert at White Plume Technologies.