Hierarchical Condition Category (HCC) Coding and Ongoing Compliance Concerns
Key Takeaways
Substance Use Disorder is a chronic, treatable medical disease. Document objectively, naming the specific substance(s) and severity using DSM-5-TR criteria.
Code with ICD-10-CM rules: apply the dependence-over-abuse hierarchy, and capture relevant states/complications (e.g., intoxication, withdrawal, delirium tremens, seizures). Do not bill with DSM codes.
Query when the record suggests SUD but lacks a clear diagnosis or severity. Keep queries non-leading and tie them to documented clinical indicators.
The office of the Inspector General (OIG) published a tool kit in December of 2023 complete with SQL scripts for ferreting out suspicious HCC coding practices. They have compiled a list of high-risk groups identified in audits for incorrect diagnosis codes that were consistently submitted to CMS. This list included diagnoses for Acute Stroke, Acute Myocardial Infarction, Embolism, Lung Cancer, Breast Cancer, Colon Cancer and Prostate Cancer. Additionally, the OIG is now looking at Major Depressive Disorder, Vascular Claudication, Pressure Ulcers and Sepsis.
How did the OIG arrive at this list? OIG data analysis showed examples such as, a single cancer diagnosis with no concomitant treatment such as chemotherapy or radiation. They concluded these diagnoses should have been “personal history of” cancer diagnoses. Coding was encountered for an embolism in the outpatient arena with no prescription for an anticoagulant. Codes submitted for an acute myocardial infarction and stroke were listed once in an outpatient encounter and there was no associated inpatient stay found for 60 days before or after the date of service associated with the diagnosis assignment.
Diagnosis coding drives the assignment of the HCC. Documentation used to assign ICD 10 CM diagnosis codes must include the following four parameters for each problem: Monitoring, Evaluation, Assessment and Treatment (MEAT). If the problems are not actively requiring monitoring, ongoing evaluation and assessment with treatment they are not codable according to CMS and the OIG. Furthermore, only eligible encounters with appropriate documentation, by a provider with valid credentialing, will be accepted for risk scoring. There is a list of provider specialties who can report HCC found here: acceptable-physician-specialty-types-py-2025.pdf
Providers must clearly indicate the type of visit, place of service, and their credential in the note. Chronic conditions must be evaluated annually. Treatment needs to be linked to the disease process. Conditions no longer considered a concern to the patient that do not require monitoring, assessment or treatment ongoing, should not be coded. A patient with a history of kidney stones who does not currently have a kidney stone or complaints concerning for a new kidney stone should not have a diagnosis of kidney stones. A patient who had a DVT 2 years ago but does not have one now, should not be coded.
Outpatient conditions not followed as an inpatient are a red flag if not mentioned and treated on admission. If you are following these chronic conditions in the outpatient arena but suddenly they are not a concern as an inpatient, this raises a red flag. A patient with systolic left heart CHF who is on Carvedilol and Lasix as an outpatient should see these meds listed and ordered in the inpatient record. The record should also show what they are being administered for.
Diagnoses used to assign an HCC must be documented in the medical record. They can be anywhere in the record as long as they are current diagnoses requiring monitoring, assessment and treatment.
Deficiencies in documentation and diagnoses can be found in the EMR if it is not set up properly. Coders should take a close look at the EMR to make sure the diagnosis code is assigned the correct description. Sit with a provider to determine their process for using the EMR and assigning diagnoses. This is an effective way to see if they are just reporting diagnoses from memory or using the tools available. Make sure only the treating providers have access to the record and user rights are set to only allow documentation and assignment of diagnosis codes by appropriately credentialed members of the care team.
Look for disconnects between different sections of the EMR. If the problem list cites the patient has CHF, Diabetes, an acute fracture of the femur and glaucoma but the medication list only shows vitamin E, Bumex, Advair, and Tylenol a query should be generated to determine why the problems are not being treated. Is the Bumex for the CHF? In the absence of a linkage statement a query is needed. Why is there nothing ordered to treat the Diabetes and Glaucoma? The initial history notes the patient ambulated without difficulty and there were no musculoskeletal complaints in the history of present illness. Is this really an acute fracture?
Coders and CDI professionals will need to be patient with the providers and work together to facilitate a compliant HCC coding environment in the clinical record. Be a sleuth and look for areas needing improvement for HCC coding. Do not go data mining to find all the diagnoses the patient ever in hopes of getting a higher paying HCC.
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