In July 2023, the Office of Inspector General (OIG) added Medicare Part C High-Risk Diagnosis Codes (AKA Risk Adjustment) Tool Kit to their work plan, with the intention of creating a resource to assist Medicare Advantage (MA) organizations with analyzing the accuracy of their risk adjustment data, which, in turn, gets submitted to CMS for reimbursement purposes. 

What is Risk Adjustment (RA)?

Risk adjustment is:

  • A process of modifying payments and setting benchmarks for chronic illnesses.
  • Allows CMS to estimate their future costs for reimbursement.
  • Allows a better understanding of the severity of patients’ chronic conditions.
  • Helps MA organizations facilitate comparisons of their plans as they relate to the health status of their members.
  • Discourages health plans and providers from enrolling and/or treating predominantly healthier patients.
  • Encourages a wide-range case mix.

Why is RA Important?

Accurate documentation and coding of a patient’s active conditions and problems being treated is extremely important for many reasons, most notably:

  1. To provide accurate information for the continuity of care
  2. To provide a snapshot of the patient’s health complexity
  3. To reflect significant active and chronic conditions.

In terms of RA, accurate documentation and coding of a patient’s chronic conditions are equally as important, on a different level.  Many chronic conditions are categorized under hierarchical condition categories (HCCs), established by CMS, for several reasons:

  1. To provide statistical data used by CMS and other health agencies.
  2. To help lower healthcare costs (Affordable Care Act).
  3. To compensate providers for treating patients who may need disease management interventions.
  4. MA organizations receive an incentive to accept enrollees with chronic conditions, the more chronic conditions treated, the higher the reimbursement is from CMS for these MA organizations.

What is a Chronic Condition?

A chronic condition, as defined by the American Medical Association (AMA), is “A problem with an expected duration of at least one year or until the death of the patient. For the purpose of defining chronicity, conditions are treated as chronic whether or not stage or severity”

Succinctly, chronic conditions are ongoing, often managed with medications, and have the potential for acute exacerbation.

Let’s explore the different complexities of the problem(s) addressed for chronic conditions, in relation to the 2021/23 E/M Guidelines, as defined by the AMA:

“Stable, chronic illness: “Stable” for the purposes of categorizing MDM is defined by the specific treatment goals for an individual patient. A patient who is not at his or her treatment goal is not stable, even if the condition has not changed and there is no short-term threat to life or function. For example, a patient with persistently poorly controlled blood pressure for whom better control is a goal is not stable, even if the pressures are not changing and the patient is asymptomatic. The risk of morbidity without treatment is significant.” 

“Chronic illness with exacerbation, progression, or side effects of treatment: A chronic illness that is acutely worsening, poorly controlled, or progressing with an intent to control progression and requiring additional supportive care or requiring attention to treatment for side effects.”

“Chronic illness with severe exacerbation, progression, or side effects of treatment: The severe exacerbation or progression of a chronic illness or severe side effects of treatment that have significant risk of morbidity and may require escalation in level of care.”

“Chronic illness that poses a threat to life or bodily function: A chronic illness with exacerbation and/or progression or side effects of treatment, that poses a threat to life or bodily function in the near term without treatment. Some symptoms may represent a condition that is significantly probable and poses a potential threat to life or bodily function. These may be included in this category when the evaluation and treatment are consistent with this degree of potential severity.”

What Diagnosis Codes get Reported?

When considering which diagnosis codes to use on claims, you can “MEAT” the requirements by documenting an assessment and plan that supports one or more of the elements of this acronym.

Elements of MEAT:

Monitoring signs, symptoms, progression and/or regression.

Evaluating things such as test results and responses to treatment.

Assessing and/or Addressing the conditions of the patient, tests ordered, referrals, reviewed records and any additional patient concerns.

Treating conditions being addressed with medications, therapies, or other treatment options.

Documentation Guidance:

One of the biggest pitfalls with reporting HCCs is knowing what you can report, and how it should be documented.  Currently, the HCCs can be reported and documented when addressed during a face-to-face or telehealth visit1, the provider is approved by CMS, condition(s) are documented as of the date of service when the condition(s) were addressed and they must be revised annually, reporting only the active conditions.

Risk adjusted diagnoses are documented by physicians who are directing the evaluation and/or treatment of the diagnoses.  If you are providing care in tandem with other providers involved in the treatment of the patient, it is important to document your part in the care of this patient. For example, if you are treating a patient who is actively being treated for an HCC qualified cancer diagnosis, and you are reviewing and discussing with the patient, notes from oncology and reports from radiology and pathology, and you decide you need to order some additional blood work to keep an eye on toxicity levels, you will document that you have reviewed the notes and provide a brief summary from each, then document your plan of ordering additional blood work to monitor for levels of toxicity.

Another pitfall to avoid is confusing the problem list with conditions addressed during the visit.  Problem lists are not acceptable documentation when coding for HCC’s.  With each diagnosis reported, there must be an indication of how it affected the care or treatment of the patient for that date of service.  There is often a preconceived notion that the problem list is equivalent to the conditions actively being treated; this is not the case, the problem list is a historical list, usually in a bulleted format, of all conditions the patient is actively receiving treatment, or has previously been treated for, that are still relevant to the care being received on the date of service. 

Example problem list:

  • Hypertension. Chronic. Onset 8/1/2015
  • Below the knee amputation, right leg. Chronic. Onset 9/24/2020
  • Hyperlipidemia. Chronic. Onset 1/1/2023
  • Personal history of breast cancer. In remission. Onset 8/24/1994
  • Diabetes with CKD stage 3. Chronic. Onset 5/26/2021
  • Liver transplant donor. (Liver donation to child). 1982
  • Sinus infection. Acute. Onset 7/20/2023

In this example, the patient is seeking treatment for the acute sinus infection.  During their next visit, assuming the sinus infection has run its course, it would be removed from the problem list, as it is no longer affecting the care of the patient. Conversely, if this is a chronic issue, you would list the problem as chronic, with the onset date AND list the acute occurrence, removing only the acute occurrence during the next visit.

Documentation Tips:

  • Documentation should “Talk the Talk” and accurately describe the care.
  • When a diagnosis is assigned, the provider must also record a unique narrative of the diagnosis as it relates to the patients care for each date of service the provider sees the patient, including the status and co-existing conditions being treated, managed, or that affect care.
  • The chief complaint (CC) should reflect the condition(s) for which the patient is being treated.  For example: Follow Up for Diabetes.
  • The physical exam (PE) should have elements of the condition(s) addressed.
  • Use terms to accurately describe the condition, such as stable, (severe) exacerbation due to, etc.
  • Avoid statements such as “Patient not at goal” without further defining what the goal is and how you plan to help the patient achieve this goal.
  • Avoid using the terminology “history of” to describe duration when a patient is actively being treated for a condition.  This can lead to the incorrect selection of the ICD-10-CM diagnosis code, creating a missed opportunity to accurately report the condition as an HCC.  Coders, Auditors, CDI Specialists, and the like refer to the standard industry guidelines for diagnosis code reporting, as directed under the ICD-10-CM Official Guidelines for Coding and Reporting, Section I.C.21.c.4:

“History (of):

There are two types of history Z codes, personal and family. Personal history codes explain a patient’s past medical condition that no longer exists and is not receiving any treatment, but that has the potential for recurrence, and therefore may require continued monitoring.

Family history codes are for use when a patient has a family member(s) who has had a particular disease that causes the patient to be at higher risk of also contracting the disease. 

Personal history codes may be used in conjunction with follow-up codes and family history codes may be used in conjunction with screening codes to explain the need for a test or procedure. History codes are also acceptable on any medical record regardless of the reason for visit. A history of an illness, even if no longer present, is important information that may alter the type of treatment ordered.”

Remember, your documentation tells a story of your treatment of the patient’s health, and then translated into a set of codes for reimbursement.  The golden rule: If you didn’t document it, it wasn’t done.

Every organization can be at risk for an audit; let LWCI help you establish an annual audit plan to add to your current compliance program. Contact our sales team today to get started working on your audit needs.

1 – subject to change