Things Your Mother Never Told You About HCC: Version 23

The 2019 CMS risk adjustment model is version 23.

The Centers for Medicare & Medicaid Services (CMS) released, in April, the latest update to the CMS-hierarchical condition category (HCC) Risk Adjustment Model (V23).  It applies to payment year 2019.  As Medicare Advantage is a prospective payment system, that means care provided to Medicare Advantage members and claims submitted in 2018 will be mapped to the new V23. 

Since this is a government program, it obviously isn’t as simple as that.  The risk adjustment factors (RAF) for dates of service 2018 will be determined by a blend of 75% V22 and 25% V23.  Over the next few years, there will be a transition to full V23 mapping for the RAF.  That doesn’t take into account normalization factors, coding intensity adjustments, or the transition to encounter data, but those are for another time.  

So what are the differences between V22 and V23?  There are several.

V23 has expanded the number of HCCs to 83 from the 79 in V22.  No HCCs were dropped between V22 and V23, so this represents an increase of 4 HCCs.  The number of mapping ICD10 codes has also increased to 9,592 in V23 from just over 9,500 in V22, and no ICD10 codes were dropped between V22 and V23.

The vast majority of the additions in both HCCs and ICD10 codes are in the mental health section.  The one exception is chronic kidney disease, stage 3 (CKD3).  CKD3 (N18.3) is the sole ICD10 code in the new HCC 138.  It has a relatively low coefficient value of 0.068 (community, non-dual, aged). 

The mental health section has seen pretty significant change between V22 and V23, both in the name of the HCC, number of HCCs and the number of mapping ICD10 codes. This is all a little tedious, but it is important, so try to hang on!

With new and modified HCCs, there has also been a change to the hierarchy table:

 _{(Above taken from page 86 in the CMS 2019 Announcement)}

Even though the above was a little tedious, it is important to stay abreast of the changes.  Similar to prior years, coding intensity adjustments may result in minor coefficient changes – up or down – in most codes.  The most impactful changes in V23 are in diabetes with complications (acute and chronic) which had about a 3½ % decrease in coefficient.  Even more impactful was in the coefficient for Major Depressive, Bipolar, and Paranoid Disorders which saw about an 11% decrease.  To maintain budget neutrality, coefficients are adjusted, usually yearly, to maintain a national average of RAF at 1.000.  Hence, it is not surprising that adding HCCs would potentially lead to a decrease in some coefficients. 

Some things haven’t changed in the transition from V22 to V23.  There must still be documentation which supports the diagnoses for a Medicare Advantage member.  There must be a face-to-face encounter with an eligible provider that generated the documentation. 

Documentation and diagnoses are determined by the calendar year, and as of January 1 of every year, all HCC diagnoses must be reconfirmed.  Yes, that lower limb amputation from last year is presumed to have re-grown, much like the tail of a salamander.  

None of us wishes to “Guild the lily” as the Bard would say.  However, only by being specific, accurate and complete in documentation and diagnosis can we appropriately represent the illness burden of our population and thereby receive correct financial support for their care.

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