Navigating CMS' HCC Version 24 to Version 28 Updates and its Impact on Value-Based-Care

By Jessica Robinson, Chief Platform Officer, The Garage

The transition from Hierarchical Condition Category (HCC) Version 24 to Version 28 is bringing significant changes that will impact Medicare programs and other value-based care programs. This transition has brought about changes that are reshaping risk scoring and impacting reimbursement methods, influencing how healthcare providers identify and care for high-risk patients. One of the most significant impacts of the version upgrade is the way risk scores are calculated for patients.

The main updates in HCC V28 are:

  • The naming and numbering of V28 HCC codes
  • The addition of 268 diagnosis codes that did not map to a payment in V24
  • Changes to ICD-10-CM code to HCC mappings
  • Changes to the HCC coefficient values
  • Removal of 2,294 diagnosis codes that no longer map to a payment HCC

These transformative changes from HCC V24 to V28 were triggered by an investigation revealing shortcomings in V24 conditions, including inaccurate cost predictions, uncommon represented conditions, and conditions lacking well-specified diagnosis coding criteria. The Centers for Medicare and Medicaid Services (CMS) utilized 2018 diagnosis and 2019 expenditures to calibrate the V28 model, allowing for more appropriate relative weights with recent utilization patterns. These updates are believed to enable CMS and constituents to better reflect the severity of patients' conditions, empowering healthcare providers to better identify and care for high-risk patients effectively. With these changes and demands in effect, we foresee the need for digital transformation solutions to assist healthcare organizations with resource allocation and target care to those who need it most.

Research indicates that the changes coming with V28 will likely lower RAF scores, with or without a change in the patient's health status. CMS used a "constraining" process, where related HCCs are given the same coefficients. Notably, in the V28 model, the Diabetes diagnosis category is significantly affected by constraining. The contribution to the RAF score from diabetic disorders will remain unchanged regardless of whether the patient has uncomplicated diabetes or diabetes with complications, resulting in a significant reduction in the RAF score for patients with acute or chronic complications from diabetes. CMS projects that the CY 2024 impact on MA risk scores of the proposed Part C CMS-HCC model is projected to be -3.12%, resulting in $11.0 billion in net savings to the Medicare Trust fund in 2024.

While these changes will pose challenges for healthcare organizations, they also create opportunities to improve accuracy, enhance patient care, and drive innovation in the healthcare industry. As the intricacies of healthcare continue to evolve, it is essential for providers, payers, and other stakeholders to adapt to these changes and leverage them to deliver high-quality value-based care to patients.

This underscores the pivotal role that data analytics and technology plays in healthcare. With the increased complexity of coding and documentation requirements, healthcare organizations must turn to turn to advanced data analytics and technology solutions to streamline processes, identify high-risk patients, and optimize their risk adjustment strategies.

In conclusion, the transition from HCC V24 to HCC V28 from the Centers for Medicare and Medicaid Services (CMS) marks a pivotal moment in the landscape of Medicare programs and value-based care. This transition reiterates CMS commitment to providing more accurate cost predictions and better specified diagnosis coding criteria. Learning to embrace the role of data analytics and technology is paramount to the success of this upgrade. Learn more about how the Garage is supporting optimized risk coding here.

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