The Centers for Medicare & Medicaid Services (CMS) work hard to improve the Hierarchical Condition Category (HCC) models that are used for risk adjustment in the constantly changing healthcare environment. The CMS-HCC models’ shift from version 24 (V24) to version 28 (V28) illustrates their commitment to precision and accuracy in risk adjustment. The blending strategy is an important part of this transformation, as it ensures a smooth transfer from the older model to the newer, more precise methodologies. We will look at how the blending technique between the V24 and V28 CMS-HCC models reduces immediate implications on Risk Adjustment Factor (RAF) ratings while allowing healthcare providers and systems to adjust to the changes. Understanding the CMS-HCC Models CMS-HCC models are critical tools for estimating healthcare expenditures for Medicare Advantage plan members. These algorithms assign risk scores to beneficiaries based on their health and demographic information. The RAF scores generated by these models have a direct impact on payment changes to Medicare Advantage plans, making accurate risk adjustment crucial for both payers and providers. The Transition from V24 to V28 The HCC coding and risk adjustment algorithms will be significantly updated as part of the transition from V24 to V28. The V28 model includes revised illness categories, updated disease relationships, and more exact coding standards. These modifications attempt to increase risk prediction accuracy by better representing the Medicare population’s healthcare demands and costs. The Blending Approach: To reduce the risk of rapid changes in RAF scores and financial instability, CMS uses a mixing strategy throughout the transition from V24 to V28. This technique entails gradually introducing the new model over a set length of time, rather than implementing it all at once. CMS ensures that healthcare providers and systems have a smooth and controlled transition by combining the risk scores from both models. The Impact of the V28 Release on RAF Scores The V28 release of the CMS-HCC model, introduced in 2021, brought significant updates to the risk adjustment methodology. These changes profoundly influenced RAF scores, leading to an expected decrease of 3.10%. Let’s explore the key changes and their implications: Key Changes in the V28 Release Updated Hierarchical Condition Categories (HCCs): Removed HCCs: Consolidation or removal of certain categories based on updated clinical knowledge and treatment practices. New HCCs: Introduction of additional categories to capture previously underrepresented conditions. Refined Mapping of ICD-10 Codes to HCCs: Improved Specificity: Enhanced accuracy in mapping ICD-10 codes to corresponding HCCs. Changes in Weighting: Adjustments in the relative weights assigned to HCCs, reflecting updated cost analyses and healthcare utilization data. Inclusion of Additional Conditions: COVID-19 Related Codes: Incorporation of codes to address the impact of COVID-19 on healthcare costs. Social Determinants of Health: Addition of codes related to social determinants influencing healthcare outcomes. Impact on RAF Scores The changes introduced in the V28 release have several implications for RAF scores: Decreased RAF Scores Due to Increased Specificity: The more precise mapping of ICD-10 codes may result in lower RAF scores, as conditions are categorized more accurately, potentially indicating lower severity or resource intensity. Impact of New and Removed HCCs: Introduction of new HCCs adds complexity but may not immediately increase RAF scores unless they capture previously under coded conditions. Removal or consolidation of HCCs could decrease RAF scores if certain conditions are no longer included or are categorized differently. Adjustment in Weighting: Changes in the weighting of HCCs reflect updated cost predictions and payment equity adjustments, which can lead to shifts in RAF scores.

The Centers for Medicare & Medicaid Services (CMS) work hard to improve the Hierarchical Condition Category (HCC) models that are used for risk adjustment in the constantly changing healthcare environment.

The CMS-HCC models’ shift from version 24 (V24) to version 28 (V28) illustrates their commitment to precision and accuracy in risk adjustment. The blending strategy is an important part of this transformation, as it ensures a smooth transfer from the older model to the newer, more precise methodologies. We will look at how the blending technique between the V24 and V28 CMS-HCC models reduces immediate implications on Risk Adjustment Factor (RAF) ratings while allowing healthcare providers and systems to adjust to the changes.

Table of Contents

Understanding the CMS-HCC Models

CMS-HCC models are critical tools for estimating healthcare expenditures for Medicare Advantage plan members. These algorithms assign risk scores to beneficiaries based on their health and demographic information. The RAF scores generated by these models have a direct impact on payment changes to Medicare Advantage plans, making accurate risk adjustment crucial for both payers and providers.

The Transition from V24 to V28

The HCC coding and risk adjustment algorithms will be significantly updated as part of the transition from V24 to V28. The V28 model includes revised illness categories, updated disease relationships, and more exact coding standards. These modifications attempt to increase risk prediction accuracy by better representing the Medicare population’s healthcare demands and costs.

The Blending Approach:

To reduce the risk of rapid changes in RAF scores and financial instability, CMS uses a mixing strategy throughout the transition from V24 to V28. This technique entails gradually introducing the new model over a set length of time, rather than implementing it all at once. CMS ensures that healthcare providers and systems have a smooth and controlled transition by combining the risk scores from both models.

The Impact of the V28 Release on RAF Scores

The V28 release of the CMS-HCC model, introduced in 2021, brought significant updates to the risk adjustment methodology. These changes profoundly influenced RAF scores, leading to an expected decrease of 3.10%. Let’s explore the key changes and their implications:

Key Changes in the V28 Release

Updated Hierarchical Condition Categories (HCCs):
- Removed HCCs: Consolidation or removal of certain categories based on updated clinical knowledge and treatment practices.
- New HCCs: Introduction of additional categories to capture previously underrepresented conditions.
Refined Mapping of ICD-10 Codes to HCCs:
- Improved Specificity: Enhanced accuracy in mapping ICD-10 codes to corresponding HCCs.
- Changes in Weighting: Adjustments in the relative weights assigned to HCCs, reflecting updated cost analyses and healthcare utilization data.
Inclusion of Additional Conditions:
- COVID-19 Related Codes: Incorporation of codes to address the impact of COVID-19 on healthcare costs.
- Social Determinants of Health: Addition of codes related to social determinants influencing healthcare outcomes.

Impact on RAF Scores

The changes introduced in the V28 release have several implications for RAF scores:

Decreased RAF Scores Due to Increased Specificity:
- The more precise mapping of ICD-10 codes may result in lower RAF scores, as conditions are categorized more accurately, potentially indicating lower severity or resource intensity.
Impact of New and Removed HCCs:
- Introduction of new HCCs adds complexity but may not immediately increase RAF scores unless they capture previously under coded conditions.
- Removal or consolidation of HCCs could decrease RAF scores if certain conditions are no longer included or are categorized differently.
Adjustment in Weighting:
- Changes in the weighting of HCCs reflect updated cost predictions and payment equity adjustments, which can lead to shifts in RAF scores.