The Centers for Medicare & Medicaid Services (CMS) regularly updates its Hierarchical Condition Category (HCC) model to ensure accurate risk adjustment and fair reimbursements for healthcare providers. With the transition from CMS HCC V24 to V28, providers must adapt to changes that impact risk adjustment coding, compliance, and financial outcomes.
For healthcare organizations, understanding these updates is critical for maintaining financial stability, optimizing reimbursements, and ensuring compliance with CMS guidelines. Adapting to these changes requires strategic documentation improvements and enhanced coding accuracy.
Why CMS Updated the HCC Model
Improving Accuracy in Risk Adjusted Payments
CMS refines its models to ensure that payments reflect the true health status of beneficiaries. The V28 model improves the capture of chronic conditions, reducing misclassification and increasing risk adjustment accuracy.
Aligning with Evolving Healthcare Needs
As patient demographics change and medical advancements improve disease management, CMS updates the HCC model to reflect these shifts. Conditions that were previously undervalued in risk scoring may now receive appropriate recognition.
Preventing Overpayments and Fraud
CMS updates aim to prevent upcoding, where conditions are over-documented to inflate risk scores. Refining HCC classifications ensures that risk-adjusted payments remain fair and justified based on medical necessity.
Key Differences Between CMS HCC Model V24 and V28
Changes in Hierarchical Condition Categories (HCCs)
Certain HCCs have been removed, merged, or modified to better represent disease severity and chronic conditions. Some conditions that contributed to risk scores in V24 may no longer be counted, requiring updates to provider documentation practices.
Recalibration of Risk Coefficients
Risk factor weights have been adjusted based on updated patient population data. Some conditions will have more impact on risk scores, while others may contribute less weight in the new model.
Greater Condition Specificity
V28 refines how conditions are grouped to better differentiate between disease severities. For example, diabetes with complications may be scored differently than diabetes without complications, requiring greater documentation specificity.
Impact on Risk Adjustment Factor (RAF) Scores
Some providers may see fluctuations in their patient population’s overall risk scores, leading to changes in reimbursement trends. Conditions previously categorized under an HCC may no longer be risk-adjustable, potentially reducing RAF scores.
Stricter Documentation and Coding Standards
The transition to V28 places a greater emphasis on accurate documentation at the point of care. Coders must ensure that conditions are well-supported by clinical documentation to justify inclusion in risk adjustment calculations.
How These Changes Affect Risk Adjustment Coding
Increased Demand for Precise Documentation
Providers must now be more specific in how they document chronic conditions, comorbidities, and complications. Generalized documentation may lead to underreported risk scores and missed reimbursements.
Changes in Reimbursement Trends
Some organizations may experience reduced payments due to lower RAF scores, while others, especially those managing high-risk populations, may benefit from improved risk adjustment calculations.
Greater Scrutiny on Chronic Condition Reporting
Providers must justify HCC codes with clear and complete medical records. Conditions that no longer count toward risk adjustment may lead to compliance risks if documented inaccurately.
Strategies for Adapting to CMS HCC Model V28
Train Providers and Coders on the Changes
Conduct educational sessions on which HCCs have been added, removed, or modified. Ensure that clinical staff understand how documentation practices impact risk scores.
Implement Risk Adjustment Software
AI-driven tools can identify missing diagnoses, suggest compliant coding, and flag documentation gaps in real time. Software integration with EHR systems ensures that risk-adjustable conditions are accurately captured.
Conduct Internal Documentation Audits
Regular audits help identify discrepancies in documentation and prevent compliance issues before CMS audits. Retrospective reviews can highlight trends in missed diagnoses and coding inefficiencies.
Strengthen Provider-Coder Collaboration
CDI teams should work closely with physicians to ensure risk-adjusted conditions are clearly documented. Establish real-time documentation feedback loops to address missing details during patient encounters.
Monitor Risk Score Trends
Track RAF scores before and after transitioning to V28 to identify unexpected shifts. Address documentation inconsistencies that may be causing risk score reductions.
Common Pitfalls and How to Avoid Them
Failing to Provide Adequate Training
Without proper education, providers may continue documenting based on V24, leading to missed risk scores. Regular training updates ensure teams stay compliant.
Relying on Outdated Coding Guidelines
Healthcare organizations should ensure coding teams have access to up-to-date CMS guidelines. Using outdated coding rules could result in claims denials and compliance risks.
Not Conducting Internal Reviews
Without audit checks, organizations may not realize they are under-documenting key conditions. Proactive monitoring prevents costly errors and missed reimbursements.
Actionable Steps for Healthcare Organizations
Review CMS Guidelines Thoroughly
Stay updated with CMS documentation on HCC model changes and risk adjustment coding updates. Work with compliance officers to ensure adherence to new requirements.
Upgrade Risk Adjustment Technology
Implement software that automates risk coding and provides real-time documentation feedback. Ensure seamless integration with EHR systems.
Engage in Continuous Education
Provide recurring training sessions for clinicians, coders, and administrative teams. Keep staff updated on HCC model modifications to ensure accurate documentation.
Collaborate with Risk Adjustment Experts
Partner with CDI specialists or risk adjustment vendors to navigate the transition smoothly. Consider external audits for quality control before CMS enforcement of V28.
Final Thoughts
The transition from CMS HCC V24 to V28 represents a significant shift in how risk adjustment scores are calculated. While these updates may initially pose challenges, they also offer an opportunity to improve documentation accuracy, compliance, and financial performance.
By investing in education, risk adjustment software, and proactive documentation strategies, healthcare organizations can successfully adapt to V28 and maximize reimbursements while ensuring regulatory compliance.
Understanding these changes now will position providers for success, ensuring that risk-adjusted payments reflect the true complexity of their patient populations.