The RCxRules Blog

HCC Model v28 Proposed Changes: Opposing Viewpoints

CMS has proposed a new risk adjustment model version (v28) for 2024 that is based on more recent data. These proposed changes would use a new ICD-10 diagnosis code to HCC mapping structure and would decrease the number of HCC codes. CMS believes that revising the model will reflect more recent utilization, cost, and diagnostic patterns.

Various stakeholders and organizations have differing viewpoints on these proposed changes. One camp believes that the new version will provide more accurate relative weights and risk scores and would have a positive impact overall.

In addition to improving payment accuracy, they posit that the updated model would also reduce coding differences between MA plans and fee-for-service Medicare providers. As MedPAC explains, “When diagnostic discretion, intentional or unintentional, leads to large differences in the coding rates between MA and FFS and across MA plans, it diminishes the accuracy of risk-adjusted payments to MA plans and increases the excess payments that MA plans receive due to higher coding intensity.”

Those in favor believe these changes will help increase the integrity of the MA program overall, and send resources towards the patients who need them. By improving payment accuracy, they believe the changes will work towards the true intent of risk adjustment coding, which is to accurately capture a patient’s health and risk factors in order to inform care.

Another camp argues that there is potential for significant revenue loss. America’s Health Insurance Plans (AHIP) claims that the new model is expected to decrease plan risk adjusted payment by 3.7%, while America’s Physician Group (APG) concludes that some members will face revenue cuts as high as 17%.

Opponents also claim that the changes could be harmful to already underserved Medicare beneficiaries. An ATI Advisory analysis says the changes could negatively affect primary care physicians and those caring for disadvantaged Medicare beneficiaries, as they could end up with fewer funds to treat patients due to a substantial redistribution of payments across different groups. As APG explains, “the findings indicate that the proposed changes will impact some beneficiaries and physicians more than others. For example, risk adjusted payments will be reduced for two-thirds (67%) of Medicare beneficiaries with diabetes. These affected beneficiaries with diabetes are more likely than the average Medicare beneficiary to be age 75 years or older, Black or Hispanic/Latino, and dually eligible for Medicaid. They are also more likely to have low income, have lower levels of education, and experience food insecurity.”

If these changes are approved, they’re likely to significantly alter the risk adjustment landscape. RCxRules will be keeping a close eye on developments moving forward.

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