A tool for determining the Hierarchical Condition Category (HCC) associated with a patient’s diagnosis converts diagnostic codes, such as ICD-10 codes, into a risk adjustment score. This score reflects the patient’s overall health complexity and helps predict future healthcare resource utilization. For instance, a complex condition like diabetes with associated complications would likely result in a higher score than a simple sprain.
Accurate risk adjustment is essential for fair and appropriate resource allocation in healthcare. These scores play a vital role in value-based care models, allowing payers and providers to accurately estimate costs, adjust payments, and ensure appropriate reimbursement for the care of patients with complex conditions. Developed to address inconsistencies in previous risk adjustment models, the hierarchical structure offers a more nuanced understanding of patient complexity, leading to more accurate predictions of resource use and cost.
