Risk Adjustment: Could Your Coding Strategy Be Hurting Your Practice?

October 17, 2017 by Antonio Arias, MBA, CHBME

Topics: Meaningful Use Stage 2, Practice Management, Medical Billing Company

As the healthcare industry moves away from the traditional fee-for-service model and over to an increasingly value-based landscape, the role of coding is becoming more important than ever. And you don’t need to take our word for it; some high-level folks in the government are speaking a lot louder than we are.

“The coding industry is at the heart of how we establish value,” said Mike Leavitt, former governor of Utah and former secretary of Health and Human Services, at the recent HEALTHCON 2017 event. “There will be an enhanced need to figure out who is doing a good job. That’s going to require coding in some form and in some way.”

Leavitt’s words are worth listening to. How well, and how accurately, you code for your services will ultimately affect your ability to comply with value-based care programs. If you don’t pay heed to your coding strategy as part of your work with a medical billing firm or in-house revenue cycle team, you’ll lessen your odds of earning incentives… ultimately hurting your bottom line.

Worse, the wrong approach to coding can attract the wrong attention. For example, the Justice Department currently has a federal lawsuit against UnitedHealth Group – the nation's largest Medicare Advantage (MA) insurer – for inappropriately coding medical claims for financial gain.

At issue is the insurer’s approach to coding for risk adjustment: MA plans are paid more for enrolling high-cost patients (and less for those in good health). High-cost patients are identified if a health care provider selects to use Hierarchical Condition Categories (HCC) codes – a specific subset of ICD-10 diagnosis codes.

Since using HCC codes can help yield higher payments, their use has been controversial ever since they were introduced in 2005. But they’re also an important key to helping MA-serving providers earn what they’re owed for treating complex patients.

And there’s no real resolution on HCC codes to report: The DOJ says that chart reviews show that “hundreds of thousands of diagnoses provided by treating physicians and submitted by it to Medicare were invalid and did not support the Medicare payments it had previously requested and obtained.” United, on the other hand, says “the complaint shows the Department of Justice fundamentally misunderstands or is deliberately ignoring how the Medicare Advantage program works.”

Regardless, it’s an important reminder to remember that your coding strategy should never, ever be about coding for the highest-fee service you can hypothetically justify (even if that may have been your strategy in the traditional fee-for-service era).

So while coding accurately for high-risk patients and procedures is warranted – and necessary – the DOJ’s investigation into HCC coding should serve as a reminder: The only bulletproof coding strategy is one that prioritizes accuracy, not revenue, with every single encounter.


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