Diagnosis Coding for Value-Based Payment: A Quick Reference Tool


Use this cheat sheet to identify diagnosis codes that are weighted for risk adjustment.

Fam Pract Manag. 2018 Mar-Apr;25(2):26-30.

Author disclosures: no relevant financial affiliations disclosed.

Diagnosis codes are increasingly used by accountable care organizations and others using alternative payment models to assess the health status of patient panels. By mapping ICD-10 codes to Hierarchical Condition Categories (HCCs), payers can factor severity of illness into value-based payment calculations, including shared savings allocations. Skeptical physicians may expect “HCC coding” to require more time clicking boxes with additional risk for payment cuts. However, we have found that by using a simple workflow intervention and tool, phy-coding is informed by HCCs and optimized for payers' risk adjustment calculations. Here's how it works.

First, identify which of a patient's chronic conditions have diagnosis codes weighted for risk adjustment. Qualifying diagnoses are typically specific, chronic, and predictive of significantly higher health costs. Electronic health record (EHR) systems can help with this process, but physician familiarity with these codes is still essential. For this reason, we created a three-page reference tool listing common diagnoses and the HCC weight for each one. We post it near our computers, where we can glance at it as we review our patient's problem list before the encounter. Our EHR time-stamps when a given problem was last updated. This information and the tool help us choose which chronic conditions to address during the visit and guide our coding for the encounter. (See “ICD-10 — HCC coding reference for family medicine.”)


  • Understanding Hierarchical Condition Categories (HCCs) and annually reporting ICD-10 codes that correspond to them is vitally important under new payment models that shift financial risk to physicians.

  • Using a quick reference tool that lists ICD-10 codes that have HCC weights can help busy practices make sure their coding accurately reflects their patients' complexity.

For example, consider Mr. White, a 62-year-old male who was seen in our clinic for a new patient visit. He had been seen in our health system in the past, so his medical history was well-documented in our EHR. A quick review of his problem list showed 19 chronic conditions. Comparing this list with our reference tool, only one — chronic hepatitis C status (ICD-10 code B18.2) — has an HCC weight. This was one of several conditions we addressed during his appointment, and we made sure to code for it and document the current status of the condition and plans for addressing it. Many common chronic conditions, such as Mr. White's hypothyroidism and essential hypertension, do not correspond to HCCs. Mr. White's problem list also includes “depression with anxiety” (F41.8). We scheduled a follow-up appointment for Mr. White in one month to discuss his mood concerns and requested records from his previous therapist. If we determine that Diagnostic and Statistical Manual of Mental Disorders criteria are met, “major depressive disorder, recurrent” (F33.9) or “major depressive disorder, in partial


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Dr. Belatti is a resident physician at St. Mary's Hospital in Grand Junction, Colo....

Dr. Lykke is a faculty physician at St. Mary's Hospital.

Author disclosures: no relevant financial affiliations disclosed.


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