The CMS V28 Risk Adjustment model refers to the latest version of the risk adjustment model used by the Centers for Medicare & Medicaid Services (CMS) to predict healthcare costs for Medicare Advantage (MA) enrollees and other risk-adjusted programs. Risk adjustment is a critical process within the Medicare program that ensures healthcare plans are fairly compensated based on the health status and demographic characteristics of their enrollees.

The CMS-HCC Risk Adjustment Model uses Hierarchical Condition Categories (HCCs) to identify various chronic diseases and conditions that impact healthcare costs. The risk adjustment model helps adjust payments to healthcare plans by assigning risk scores based on these conditions, allowing for accurate funding based on the predicted healthcare needs of beneficiaries.

CMS-HCC Risk Adjustment Model V28

Version 28 (V28) of the CMS-HCC risk adjustment model represents the most recent update to the methodology and coefficients used to calculate risk scores. It takes into account the latest healthcare trends, clinical guidelines, and coding practices to improve the accuracy of payment adjustments.

The CMS-HCC model V28 is based on three essential components:

1. Diagnoses: The model relies on ICD-10 diagnoses reported by healthcare providers to identify chronic conditions.
2. Demographics: Age, gender, disability status, and dual eligibility status (enrollment in both Medicare and Medicaid) also influence the risk score.
3. HCC Categories: Diagnoses are grouped into HCCs based on clinical similarities and cost implications.

Key Features of the CMS-HCC V28 Risk Adjustment Model

• Increased Focus on Chronic Conditions: As with previous versions, the V28 model assigns higher risk scores to individuals with chronic and complex conditions. Conditions like diabetes, chronic kidney disease, and congestive heart failure are heavily weighted, reflecting their cost impact on the healthcare system.
• Hierarchical Grouping: The “hierarchical” aspect of the model ensures that related conditions are grouped in a clinically meaningful way. For instance, a patient with severe diabetes and complications will be assigned a higher risk score than a patient with uncomplicated diabetes.
• ICD-10-CM Code Mapping: The V28 model continues to rely on ICD-10-CM (International Classification of Diseases, 10th Revision, Clinical Modification) codes. The mapping of diagnoses to HCC categories is refined in each version to align with the latest coding practices and healthcare data. cms-hcc risk adjustment model v28 coefficients
• Dual Eligibility and Socioeconomic Status: Recognizing the higher healthcare needs of patients who are eligible for both Medicare and Medicaid, the CMS-HCC V28 model incorporates factors such as dual eligibility status, which reflects socioeconomic status and access to care.

CMS-HCC V28 Coefficients

The CMS-HCC V28 model coefficients are numerical values that represent the relative costs associated with each HCC category. These coefficients are used to calculate an individual’s overall risk score. Each condition in the HCC model is assigned a coefficient that reflects the expected healthcare expenditure relative to the average Medicare beneficiary.

For example:

• A patient diagnosed with diabetes with chronic complications (HCC 18) might have a higher coefficient than a patient with diabetes without complications (HCC 19).
• The coefficient values are additive, meaning that if a patient has multiple conditions, the risk score reflects the sum of the individual coefficients for each diagnosed condition.

Example of CMS-HCC V28 Coefficients

Here is an illustrative example of how the CMS-HCC V28 coefficients are applied:

• HCC 18 (Diabetes with Chronic Complications): Coefficient = 0.45
• HCC 85 (Congestive Heart Failure): Coefficient = 0.59
• HCC 2 (Stroke): Coefficient = 0.38

If a patient has all three of these conditions, their risk score would be calculated as: Risk Score = 0.45 (HCC 18) + 0.59 (HCC 85) + 0.38 (HCC 2) = 1.42

The risk score is then multiplied by a base payment rate to determine the total reimbursement that the Medicare Advantage plan receives for that patient. Higher risk scores equate to higher expected healthcare costs, thus ensuring that plans are compensated appropriately.

Updates in CMS-HCC V28

The V28 update reflects ongoing changes in the healthcare landscape. Some key changes and updates in this version include:

• Updated Coefficients: The V28 model includes new coefficient values that have been recalibrated based on more recent data, ensuring that payments more accurately reflect actual healthcare costs.
• Addition or Modification of HCCs: CMS regularly adds or modifies HCC categories to reflect new clinical knowledge or coding practices. The V28 model may include new HCCs for conditions that were not captured as effectively in previous versions.
• Improved Accuracy: As healthcare data improves and coding practices become more standardized, the V28 model is designed to provide more precise risk adjustment and payment accuracy.

Impact of CMS-HCC V28 on Medicare Advantage Plans

The CMS-HCC V28 model has a significant impact on Medicare Advantage plans, as it directly influences the payments they receive. Accurate coding and documentation by healthcare providers are essential for ensuring that plans are fairly compensated for the risk they bear.

• Accurate Coding: Providers must ensure that diagnoses are coded correctly and comprehensively. If certain chronic conditions are not documented or coded accurately, the risk score (and thus payment) may be lower than it should be.
• Payment Adjustments: The model’s updated coefficients and HCC categories allow Medicare Advantage plans to receive payments that better align with the actual cost of care for high-risk populations.
• Quality and Care Management: The CMS-HCC V28 model incentivizes healthcare plans to manage chronic conditions more effectively, as these conditions significantly impact risk scores and subsequent payments.

Conclusion

The CMS-HCC Risk Adjustment Model V28 plays a pivotal role in Medicare Advantage and other risk-adjusted payment programs. By using updated coefficients and improved classification of chronic conditions, it ensures fair compensation for healthcare providers based on the predicted costs of enrollees. This version emphasizes accurate diagnosis coding, reflects current healthcare trends, and aims to improve payment accuracy for high-cost populations.