HCC coding is a way of managing risk adjustment by estimating the future costs of healthcare for a given patient. It relies on Hierarchical Condition Categories (HCCs) – medical codes representing specific groups of medical conditions, which have been used by the Centers for Medicare & Medicaid Services (CMS) since 2004. The shift toward value-based healthcare has seen HCC coding take on an increasingly central role in healthcare.
HCC coding relies on the International Classification of Diseases, Tenth Revision (ICD-10) – an updated version of which is released each year. Using this guide, a given patient’s HCCs are determined based on medical conditions the patient has in a specific year, with each condition having a weight reflecting the impact it is expected to have on a patient’s healthcare costs.
A given patient’s RAF score depends heavily on the list of the patient’s HCC diagnoses. Since the RAF score affects the amount that the healthcare provider will be paid, it is important to have a full list of relevant HCCs for any given patient. Incomplete lists of HCCs for patients can result in a needless loss of revenue for their providers, creating a financial hurdle that can prevent a value-based system of healthcare from working as it should.