Don’t Worry About It

So that you too can be wildly successful in caring for your Medicare Advantage and Managed Care Medicaid patients, I’m going to tell you absolutely everything you need to know about the construction of the Hierarchical Condition Category (HCC) coding system.


What the heck are HCCs?


When diagnostic codes for Medicare Advantage or Managed Care Medicaid patients are submitted for payment, the government maps them to one of about 70 different HCCs.


Here’s the spread sheet. It’s released yearly by CMS.


Each HCC is associated with a given financial adjustment to the patient’s monthly capitation, further modified by the patient’s socio-economic factors.


The dollar amount of each adjustment is based on how much it costs the government to care for a patient with that diagnosis under traditional Medicare. Though it’s very complex, I’d be happy to go through the formula—but  I promised in my very first blog post that there’d  be no math.


The risk adjustments for every HCC submitted for a specific patient over the course of a calendar year are added up and multiplied against a statutory dollar rate based on your patient’s county of residence—and thus is determined the monthly capitation rate your insurer will receive to cover the care costs of that particular patient over the next year.


The official 2018 county rate book can be found here.  It’s released by CMS yearly.  It’s a formidable document.


Some HCCs cancel others out—hence the “hierarchical.”


Some augment each other for an additional financial adjustment.


HCCs are recalibrated every two years. Some consolidate. Some disappear. New ones get created.


Now that the definitions are out of the way, here’s what you absolutely MUST know about how the HCC system is constructed in order to be outrageously successful . . .




Not a damn thing.

  • Gather a panel of patients.
  • Every calendar year, submit their success codes systematically and accurately.
  • Deliver beneficial care efficiently.

That’s really all you need to know.


I know all this HCC stuff because I find it fascinating.


You almost certainly do not.


So, again:

  • Gather a panel of patients.
  • Every calendar year, submit their success codes systematically and accurately.
  • Deliver beneficial care efficiently.

And don’t worry about anything else.








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