In early 2023, the Center for Medicare and Medicaid Services (CMS) proposed several significant rule changes to be implemented in 2024. In April of this year, the CMS adopted 21 of 22 proposed amendments, 17 of which being adopted as written. These newly accepted changes embrace the shifting industry focus towards confronting underlying Social Determinants of Health (SDoH) and associated care costs to best address population health on a more holistic level.

While industry perception around such drastic change may lean negative, the adopted rule changes will in fact have positive, far-reaching implications for healthcare providers of all sizes across the country.  In essence, this major rule change will ensure that as an industry, we are able to capture of the sickest of the sick, thus fulfilling the time-honored Hippocratic oath taken by healthcare providers.

What Rules are Changing in 2024?

In summary, the changes being adopted in 2024 will include the CMS’s addition of HCCs (Hierarchical Condition Categories), for a total of 266 HCCs, and the removal of 2,161 ICD-10 codes (diagnoses) that map to HCCs. Additionally, all DM (disease management) will map to a single diagnosis and manifestation(s) will no longer need to be spelled out for incremental HCC capture and all coefficients will change. In a previous blog post, we had indicated that HEDIS (healthcare effectiveness data and information set) would include a two-part SDoH screening, however, the CMS has not provided final guidance on this portion of the proposed rule changes.

Specifically, the changes adopted are as follows:

2024 Changes
Notes & Clarifications
HCC 18 Diabetes with Chronic Complications* Only one coefficient for all DM*
HCC 21 Protein-Calorie Malnutrition Removed
HCC 22 Morbid Obesity Reduced coefficient
HCC 59 Major Depressive, Bipolar, and Paranoid Disorders Only moderate and severe, coefficient reduced to 0.299
HCC 85 Congestive Heart Failure More category breakdowns available for more acute conditions
HCC 88 Angina Pectoris Removed, unless noted as “unstable”
HCC 108 Vascular Disease** Removed, unless notes as “with complication”**
HCC 111 Chronic Obstructive Pulmonary Disease Asthma added
HCC 138 Chronic Kidney Disease, Moderate (stage 3) Coefficient increased to 0.127

*Diabetes with or without complication (HCC categories 36, 37, and 38) captures only one coefficient.

**Arterial Atherosclerosis with intermittent claudication (or PAD) may not be a good predictor of medical expenditure, as evidence suggests that patients with intermittent claudication often do not require treatment and may be an incidental CT finding (such as atherosclerosis).

Other 2024 Changes Worth Noting

In addition to the changes noted above, the CMS is also including the following in their 2024 rule changes:

  • Drug-induced conditions, such as pancytopenia and neuropathy, have been eliminated
    • Drug-induced complication is due to another clinical/empirical consideration and captured in the underlying disease process
  • Dialysis has been eliminated
    • Dialysis coefficient will automatically be incorporated into the ESRD segment
  • Coefficients increased for dementia, severe mental health and substance abuse disorders, moderate CKD, pressure ulcers, and transplants
  • Asthma has been added to the model
  • In addition to the coefficient values being changed, all HCC numerical rankings have been modified

To review the changes directly from the CMS, the Final Rule Fact Sheet can be found here:

When Will 2024 CMS Changes be Implemented and How Can Your Organization be Prepared?

Per the CMS, changes will be phased in starting retrospectively with the calendar year 2023 and will be phased in over three years given the scale at which the rules will be changing. These changes will be fully implemented in 2025. Clinical Documentation Specialists should not wait to begin preparing for the implementation of the upcoming changes. A robust internal continuing education program within your facility can help to prepare your staff for major upcoming federal rule changes.

For more in-depth guidance on how these changes may affect your business or strategies to implement these changes, reach out to Harmony Healthcare today.

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