Understanding the Impact: Latest HCC Updates on ACOs and Compliance

The Centers for Medicare and Medicaid Services (“CMS”) utilizes risk adjustment factors to estimate the cost of Medicare Advantage (“MA”) beneficiaries and those associated costs of providing care. Risk adjustment factor scores also govern the amount paid by the health plan during the year for said beneficiary care. Along with adjusted risk factor scores for age, sex, geographical location, and dual coverage eligibility, MA plans also allow a higher risk factor to score beneficiaries who have multiple chronic conditions whose level of severity are much greater, and the estimated cost to treat the beneficiary are estimated at higher benchmarks.

CMS released the “Advanced Notice of Methodological Changes for CY 2024” on May 1, 2023. The change will affect MA capitation rates along with Part C and Part D payment policies. The Advanced Notice included drastic changes to the MA risk adjustment model, proposing a change from Version 24 to Version 28. CMS noted the changes were initiated to better align with Medicare Fee-For-Service (MFFS) to clinically identify those conditions which may have a coding variation. In the latter portion of CY 2022, CMS released numerous audit findings noting the Risk Adjustment Model included ICD-10-CM diagnosis categories that could include variations leading to inappropriate assignment by providers. CMS also cited that the diagnosis codes did not provide a clear picture of future cost predictors, along with models in the Hierarchical Condition Categories (“HCC”) payment models were insignificant, included diagnoses that were rarely seen, and did not meet coding specificity criteria.

Learning Objectives/Agenda

• Review upcoming CY 2024 MA changes for the risk adjustment model
• Discuss how the upcoming changes will affect HCC coding assignment
• Provide education regarding the Version 28 model and provide examples of new coding methodologies
• Question and answer session
• Summary and final thoughts

Why is this topic timely/important?

With the upcoming changes, compliance is key. The model that has been standard since 2015 is going to change the way we do business across MA plans. Provider documentation will be essential in assigning the proper code and HCC assignment. One of the largest changes to the RA model for CY 2024 is going to be the expansion of HCC categories from 86 to 115; along with the deletion of 2,194 diagnosis codes that risk adjusted and will no longer lead to additional payment. In the new model, Diabetes will limit the coefficient categories that also currently carry the same HCC weight. In the new V28 model, CMS adjusted all the relative factor weights for diabetes codes and reclassified them into four (4) levels instead of three (3). Additionally, the risk adjustment model is going to drop solid organ transplants and instead, will classify under the specific body system.

Who would benefit from this topic?

• HCC Coders
• Auditors
• CEOs
• HIM Directors/Managers
• Insurance Company HCC Adjusters
• Physicians and NPPs
• Revenue Cycle Managers and staff

What’s the presenter's background/expertise on this topic?

Amy is the Manager of HCC Coding/Audit & Education Services with more than 20 years of medical billing and coding experience. Her high-level auditing skills encompass both facility and professional fee services. Specializing in revenue cycle management, inpatient/OP/OBS/ANC/ED and SDS, Amy’s broad expertise includes RAC reviews, charge master reviews, inpatient MS-DRG and APR-DRG, outpatient coding assessments and clinical documentation improvement.

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