MIPS TIPS

What is HCC and How Does It Impact the MIPS Cost

Category? – Oct. 25, 2018
Presented by HealthInsight and Mountain Pacific Quality Health
Tina Morishima, CPC, Mountain-Pacific Practice Consultant
Cathy Nelson, RN, Mountain-Pacific Practice Consultant
 HealthInsight

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 Mountain-Pacific Quality Health

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 Our Presenters

Cathy Nelson, RN Tina Morishima, CPC

 Polling Question
• Do you know what HCC and RAF is?
– Yes
– No
 Agenda
• What are HCCs and RAFs?
• Case Scenario
• Describe the MIPS Cost Category
• Describe how HCCs relate to the MIPS Cost Category
measures
– Total Per Capital Cost
– Medicare Spending Per Beneficiary
 Terminology
• CMS - Centers for Medicare & Medicaid Services
• HCC - Hierarchical Condition Categories, chronic conditions
used to create a risk adjustment methodology
• RxHCC – Some HCC codes adjust risk due to prescription
burden of disease
• RAF – Risk Adjustment Factor, assessing the acuity of illness
based upon reported ICD-10 codes and demographics
• ICD-10 – International Classification of Diseases, volume 10
• MIPS – Merit-based Incentive Payment System
• TPCC – Total Per Capita Costs for all attributed beneficiaries
• MSPB – Medicare Spending Per Beneficiary
HCC
 What is HCC?
• Hierarchical Condition Categories (HCC) – Chronic
conditions used to create a risk adjustment
methodology
• RxHCC – Some HCC codes adjust risk due to
prescription burden of disease
• There are 79 HCC codes in risk adjustment
• There are over 70,000 ICD-10 CM codes
– 9,000 ICD-10 map to 79 HCC codes in the risk adjustment
model
• Creates a RAF score for each eligible beneficiary that
reflects patient’s health conditions
 Hierarchical Condition Categories
79 Condition Categories examples

Diabetes Vascular Psychiatric

Peripheral vascular Major depression
DM with complications
disease (PVD) HCC disorder
HCC 17, 18
108 HCC 58

Kidney Substance
Chronic kidney disease,
Abuse
stage 4 (CKD) HCC 137 Alcohol/Opioid
dependence HCC 55
 What is RAF?
• Risk adjustment factor is a numeric value assigned by CMS to identify the health
status of a beneficiary/enrollee
• Risk adjustment score is determined by using a combination of demographic
information along with disease information to predict future healthcare cost for
enrollees
– Demographic
• Age, gender, Medicaid status, disability, geography, institutional living status
– Diseases
• Diagnoses submitted by providers
– PCPs, Specialists, Ancillaries, Hospitals, SNFs. PTs etc.
• CMS requires that a qualified health care provider identify all conditions that
may fall within an HCC at least once, each calendar year
– Risk scores reset each year
Interpreting the Risk Adjustment Factor

• RAF score identifies patient’s health status

– Low RAF score may indicate a healthier population
– High RAF score may indicate members with increased health risks
OR
– Low RAF score may falsely indicate a healthier population due to:
• Incomplete and/or inaccurate ICD-10 CM coding
• Diagnoses are under reported
• Patients who were not seen annually
– High RAF score may be inflated due to:
• Reported diagnoses not documented
• Over coding (i.e. copying and pasting problem list into assessment and plan)
 Case Scenario

Demographics (Age/Sex) High Risk Chronic

Example Conditions
76-year old female
Medicaid eligible
Diabetes
Vascular disease
Congestive heart failure

Total RAF 1.862

 RAF Coding Example

No condition Some conditions All conditions

coded RAF coded RAF coded RAF
76 year old female 0.468 76 year old female 0.468 76 year old female 0.468

Medicaid eligible 0.177 Medicaid eligible 0.177 Medicaid eligible 0.177

Diabetes with DM without DM with

complications X complications 0.118 complications 0.368

Vascular disease X Vascular disease X Vascular disease 0.299

Congestive heart
failure
isease X CHF X CHF 0.368
interaction Disease interaction Disease interaction
(DM+CHF) X (DM+CHF) X (DM+CHF) 0.182

Total RAF 0.645 Total RAF 0.763 Total RAF 1.862

 Patient Care

Good documentation = Good patient care

HOW IS HCC AND RAF RELATED TO CMS
QUALITY PROGRAMS?
 History

2017
MIPS Cost
2013 Category
Value Modifier
Program
2004
Developed
HCC and RAF: Essential in Today’s Payment Models

Characterizes Risk

Provides patient-centered care

Enhances shared savings

 Overview of the MIPS Cost Category

• Weighted at 10 percent of your final MIPS score in 2018, 15

percent in 2019 and up to 30 percent by the 2022
performance year
• Two measures in performance year 2018
– Total per capita cost per beneficiary (TPCC)
– Medicare Spending per beneficiary (MSPB)
• Performance year 2019 will add episode based measures
• CMS calculates cost by administrative claims data, rather
than provider submitted data

Important to understand how CMS uses claims data to calculate your

performance in this category to have an impact on your final cost score.
Medicare Spending Per Beneficiary
• Medicare Spending Per Beneficiary (MSPB).
This measure includes Medicare Part A and
Part B claims submitted for services from three
days prior to 30 days after an inpatient
hospitalization and attributes all of these costs
to the physician with the most (plurality of)
Part B charges during the period from the
patient’s inpatient admission to discharge
date.
Calculation of MSPB
 MSPB Calculation Example

• Sum of Ratio = Payment-standardized observed

Expected MSPB Costs

HCCs incorporated in Expected Costs

 RAF Coding Example

No condition Some conditions All conditions

coded RAF coded RAF coded RAF
76 year old female 0.468 76 year old female 0.468 76 year old female 0.468

Medicaid eligible 0.177 Medicaid eligible 0.177 Medicaid eligible 0.177

Diabetes with DM without DM with

complications X complications 0.118 complications 0.368

Vascular disease X Vascular disease X Vascular disease 0.299

Congestive heart
failure
isease X CHF X CHF 0.368
interaction Disease interaction Disease interaction
(DM+CHF) X (DM+CHF) X (DM+CHF) 0.182

Total RAF 0.645 Total RAF 0.763 Total RAF 1.862

 Total Per Capita Cost (TPCC)

• Total Per Capita Cost (TPCC). The TPCC

measure is a measure of all Medicare Part A
and Part B costs for patients attributed to the
individual clinician with the most allowed
charges for E&M services other than inpatient
hospital, emergency department, and skilled
nursing visits during the 2018 performance
period.
Calculation of TPCC
 Example Calculation for TPCC

HCC/RAF are incorporated in Expected Cost calculation

Scoring the Cost Performance Category

• Must meet or exceed the case minimum for the cost

measure
– TPCC=20
– MSPB=35
• If only one can be scored, the score is equally
weighted average of the scored measures
• If neither measure can be scored, reweighted to
quality category
 Summary
• HCC coding is an accurate representation of the
patient’s health status
• The cost category weight is increasing and will have a
greater impact year to year
• Cost category is the hardest to change and least
understood.
• HCC brings more clarity to the health care system and
helps bring reimbursement in line with quality and
value
 Resources

• Cost Performance Category Fact Sheet

• MIPS Total Per Capita Cost for All Attributed
Beneficiaries
• MIPS Medicare Spending Per Beneficiary
How to Ask a Question
 Questions

This material was prepared by HealthInsight, the Medicare Quality Innovation Network-Quality Improvement Organization for Nevada, New Mexico, Oregon and Utah, under contract with
the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services. The contents presented do not necessarily reflect CMS policy. 11SOW-
D1-18-80
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