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Hierarchical Condition Categories

By Jan Willis


Hierarchical condition category risk adjustment is the system that is being used by the centers of Medicare and Medicaid services in order to be able to properly calculate the cost that an individual enrolled in the Medicare advantage program will likely cost over the time period of a year. HCC risk adjustment is based off of the hierarchical condition categories that are used to code the charts of Medicare advantage enrollees.

The hierarchical condition categories describe a number of different health conditions or illnesses that are likely to be an issue in the lives of those enrolled in the Medicare advantage program. Currently there are 87 different categories used in the HCC system, which is a recent increase up from the previous 70 categories that were being used. Each one of the categories is assigned to represent a specific health issue or condition.

Each of the conditions that are coded for also has a financial amount assigned to it. These financial amounts represent the amount that it will likely cost to care for an individual who has this specific health condition. The amount of money associated with it is what the condition will cost over the time of one year. For patients that have more than one condition, they will be assigned more than one code, and therefore receive more reimbursement to their health insurance companies.

The amount of diagnostic codes that an individual can have applied to their medical charts can vary from one to many different ones. the patients who fall into a number of different hierarchical condition categories will receive more compensation through the Medicare advantage program. Being able to calculate these numbers accurately and correctly will help to lower the costs associated with the Medicare advantage program.

Risk adjustment is the method of taking a number of different pieces of information about a single group of patients in order to properly estimate how much money these individuals will cost. These numbers are then used for budgetary purposes as well as research. Making sure that each patient is coded correctly for HCC risk adjustment is absolutely necessary in increasing the amount of potential cost savings for the program and the centers for Medicare and Medicaid.




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