What is a consequence of improper HCC coding?

Improper HCC coding can lead to significant consequences, particularly the risk of audits, financial penalties, and loss of funds. Accurate HCC coding is critical as it directly affects risk adjustment models used by Medicare and other payers to determine reimbursements for providers. When coding is incorrect, it may result in the denial of claims or reduced funding, as the healthcare organization may not receive appropriate compensation for the care provided to patients. This not only jeopardizes the financial stability of the practice or facility but also puts it at risk for heightened scrutiny from auditors, which can lead to additional penalties if discrepancies are found. Thus, maintaining accuracy in HCC coding is essential to ensure compliance and secure necessary funding for healthcare services.