Skip To Navigation Skip To Content Skip To Footer
    Insight Article
    Home > Articles > Article
    Chris Harrop
    Chris Harrop

    Making sense of HCCs in the gastroenterology practice space

    The basis of ICD-10 is documenting a diagnosis — a specific diagnosis, when possible. If that’s not possible, signs and symptoms suffice, but a provider needs to show how they affect care and are relevant to the encounter. Especially when it comes to establishing medical necessity for CPT and HCPCS coding, “if it’s not documented, it was not done.”

    Now add in chronic diseases, which represent an increasing chunk of the nation’s overall health expenditure. For outpatient clinical documentation, chronic conditions “treated on an ongoing basis may be coded and reported as many times as the patient receives treatment and care” for them, per Section IV of the coding guidelines.

    Still seems straightforward — until you stop thinking about the patient in the abstract and actually think about who that patient is.

    “If a patient shows up to your practice and they’re complaining of heartburn and they’re 25 years old and otherwise healthy, that’s probably going to look different and you’re probably going to treat that patient different than a 60-year-old patient … complaining of burning in the chest, who’s had a heart attack,” or any number of chronic conditions, says Stacey Torturicia, CPC, CPMA, CRC, FAAPC, chief executive officer and owner, Stalking Horse LLC, Weeki Wachee, Fla.

    When a patient is assessed differently, the complexity of care shifts. When those chronic conditions are considered in an assessment, “you need to be documenting it,” Torturicia says. “You need to be thinking in ink.”

    In the past, providers may have listed diagnoses on a problem list, but coding for a diagnosis on a list is not advised without support for it in the record of that encounter. If that diagnosis affects care, it’s best to document it in the assessment and plan, Torturicia says, especially if a physician is doing his or her own coding within an EHR.

    “When they get into that assessment section, the system is asking them to actually link a diagnosis description with a code, and then that code is actually what’s going out on the claims,” she says. “Coding rules say that if it’s in the [history of present illness], technically it can be coded.”

    The MEAT of things

    Past and present diagnoses make a world of difference when stepping into the realm of hierarchical condition category (HCC) coding for gastroenterology providers and practices. Someone with a “history of” ulcerative colitis, as coded, is not the same as picking an active code to note an ongoing chronic condition.

    Torturicia suggests reviewing past records to pull out conditions that may have been coded as a “history of” when, in fact, an active code would be more accurate and support a more robust picture of that patient’s overall health for risk-adjustment purposes. Each HCC has an associated risk adjustment factor (RAF) value, and the sum of a patient’s RAFs then makes up his or her risk score, which represents a Medicare beneficiary’s expected medical cost relative to an average expected cost.

    But to determine if a diagnosis meets the criteria for reporting and playing a part in HCC coding, providers should use the MEAT method for reporting:

    • Monitor: This includes signs, symptoms, and disease progression and/or regression. For example: A patient with generalized abdominal pain might be documented as, “Patient’s abdominal pain is progressing and occurring on a daily basis.”
    • Evaluate: This includes review of test results, medication effectiveness and/or response to treatment, such as “stable,” “improving,” “worsening” or “exacerbation.” For example: A patient with gastroesophageal reflux disease (GERD) who is tested might be documented as, “The EGD performed on [date] shows inflammation.”
    • Assess/Address: This includes ordering tests, discussion, review of records and/or counseling. Something as simple as documenting the scheduling of an EGD, CT scan or ordering of an HCV antibody and HCV viral load test may satisfy this criterion.
    • Treatment: This includes referral, medication(s), planned surgery, therapies and/or other modalities, for example: documenting the ordering of Pepcid AC for GERD or an over-the-counter gas relief for generalized abdominal pain. “If a medication is prescribed, that condition is being treated; therefore, it must be active, so it supports coding,” Torturicia says.

    The MEAT method, as used by the Centers for Medicare & Medicaid Services (CMS), will help support medical necessity in addition to showing a claim is supported as billed, Torturicia noted, which is especially vital for visits coded for higher levels.

    Sorting it out

    Sorting out the various HCCs helps bring clarity to a patient’s risk score — this is where the “hierarchical” portion comes in. In a final step, hierarchies are imposed on some sets of the condition categories so that credit is not given for multiple conditions within a category.

    In the hierarchy, only the most severe manifestation within one category counts toward the calculation, and certain categories outrank others based on severity of illness (SOI), bringing a higher value to the RAF. For example: a diagnosis of Type II diabetes without complications (HCC 19, RAF 0.106 0.494) would be outranked if a diagnosis of Type II diabetes with diabetic gastroparesis (HCC 18, RAF 0.307) is substantiated.

    Though HCCs reflect hierarchies among related disease categories, unrelated disease HCCs are cumulative. The risk score for three separate HCCs coded would reflect treatment costs for all three separate conditions, such as a male patient with:

    • Malignant neoplasm of the sigmoid colon (HCC 11);
    • Major depressive disorder, single episode, moderate (HCC 58); and
    • Cirrhosis of liver (HCC 28)

    Disease interactions add further complexity in the CMS-HCC model. When two diagnoses add to disease burden and cost of care in a way that’s greater than the diagnoses’ individual effects, a disease interaction RAF is added to the RAF scores for the respective HCCs.

    For example: The presence of both malignant neoplasm of esophagus (C15.9, HCC 9) and antineoplastic chemotherapy induced pancytopenia (D61.810, HCC 47) leads to higher expected costs than would be calculated by adding the separate increments alone.

    All of this is based on actuarial models, Torturicia notes, which makes claims data especially important. “It’s really prospective — your claims data is of the utmost importance because that’s how they’re getting this information to set benchmarks for the next year,” she added.


    Reflecting the most accurate SOI and disease burden for patients means that chronic conditions should be reported at least once in a calendar year to provide the best possible risk adjustment of the patient population. It also provides a bonus of ensuring proper documentation during an auditor review.

    “Success in risk adjustment is really dependent on clinical documentation, coding and billing,” Torturicia says. “A clinical documentation improvement (CDI) program … is a great place to start. And that doesn’t mean that I’m telling you to buy the most expensive equipment or hire a ton of people. There are simple processes that you could put in place and develop your own program internally to just start making those changes.”

    Beyond proper documentation of chronic conditions, Torturicia recommends working with payers to get access to historical claims data to understand where there may be gaps or inaccuracies for private plan shared-savings programs similar to Medicare.

    For a physician practice billing and coding staff, becoming a certified risk adjustment coder (CRC) may be the next logical step in addition to earning certified professional coder (CPC) status. “What the CRC does is make sure that a person has the fundamental basics … understanding how risk adjustment actually works and how it works within health insurance organizations and physicians’ offices,” Torturicia added.

    What are HCCs?

    Hierarchical condition categories are used in conjunction with patient demographics and diagnosis coding to organize conditions and diseases, assess risk and predict costs. ICD-10 codes are groups based on clinical similarities and cost implications to establish something akin to a case mix index.

    This type of risk adjustment is used for managed Medicare plans (CMS-HCCs), as well as managed commercial plans in health insurance exchanges (HHS-HCCs).

    Learn more

    Clinical documentation is at the heart of every patient encounter, whether the encounter is inpatient or outpatient. Learn strategies for implementing a CDI program in your practice. Click here


    Chris Harrop

    Written By

    Chris Harrop

    A veteran journalist, Chris Harrop serves as managing editor of MGMA Connection magazine, MGMA Insights newsletter, MGMA Stat and several other publications across MGMA. Email him.

    Explore Related Content

    More Insight Articles

    Explore Related Topics

    Ask MGMA
    Reload 🗙