As the healthcare landscape evolves, the transition to the CMS-HCC (Hierarchical Condition Category) Model V28 represents a significant shift for health plans. RAAPID, a pioneer in healthcare technology solutions, is at the forefront of supporting health plans in navigating this transition. This blog provides insights into the CMS-HCC Model V28, its implications, and strategies for health plans to effectively adapt to these changes.
- Understanding the CMS-HCC Model V28
- Strategic Planning for Health Plans
- New Risk Adjustment Model Version 28 & its Impact
- CMS-HCC Version 28 Impacts Patients
- Beneficiary Risk Scores Influenced by V-28 Risk Adjustment Model
- Key Changes Under V28
- V28 RAF Score Calculation – How it’s Done
- Comparison between V24 to V28
- Challenges Posed by New Risk Adjustment V28 Model
- Conclusion
Understanding the CMS-HCC Model V28
The CMS-HCC Model V28, set to fully transition by 2025, introduces substantial changes in risk adjustment and reimbursement methodologies. This model is more refined, with an expanded number of HCCs (from 86 to 115), changes in ICD-10-CM to HCC mapping, and adjustments in coefficient values. These changes are based on updated fee-for-service data and aim to more accurately reflect recent utilization, coding, and expenditure patterns.
For health plans, this transition is crucial. The V28 model is expected to decrease Medicare Advantage risk scores by 3-8%, which translates to substantial changes in revenue and strategic planning. Health plans must proactively adapt to these changes to maintain financial sustainability and operational efficiency.
Strategic Planning for Health Plans
The phased transition to CMS-HCC Model V28 offers health plans the opportunity for strategic planning. RAAPID’s solutions, with our AI, ML, NLP, and knowledge graph technologies, are ideally suited to assist health plans in this transition. By leveraging our platform, health plans can:
- Accurately assess risk and ensure compliance with regulatory requirements.
- Proactively plan for anticipated changes in revenue and risk scores.
- Minimize operational disruptions and maintain focus on patient care and value-based partnerships.
- Gain a competitive edge by adapting early to the new model’s requirements.
New Risk Adjustment Model Version 28 & its Impact
The changes in CMS-HCC Model V28 will impact RAF (Risk Adjustment Factor) scores significantly. Notably, the model uses a constraining process where related HCCs are given the same coefficients. This could lower RAF scores for many patients, especially those with chronic conditions like diabetes. For health plans, this means a need for precise identification of HCCs and robust evidence retrieval from medical records.
RAAPID’s cloud-based solutions enable health plans to navigate these complexities by providing accurate chronic condition extraction and risk score calculation, critical for adapting to the V28 model.
First, let us look at how V28 ( New Model) Impacts Providers & then we will see how it impacts Patients.
Managing two versions will present challenges for providers due to differences between systems. Conditions classified as HCCs in one version may not be in the other.
Although a diagnosis might be categorized as an HCC in both versions, the specific HCC and RAF could differ.
For instance, diabetes with and without complications carries the same RAF in version 28, whereas a diabetic complication in version 24 yields a higher RAF than diabetes without complications. Organizations will aim to pinpoint the primary HCCs among their patient base to assess and grasp the possible repercussions of the two model iterations.
As HCC models progress, one aspect that stays consistent is the significance of thoroughly documenting conditions with clinical precision. This precision ensures the intricacies of the patient population are captured and furnishes CMS with coded data for future analysis to inform model recommendations.
The new HCCs are designed to capture more complete and accurate data about the health status of patients with chronic conditions. This will help medical practices better understand their patient’s health needs and provide the care they need to manage their conditions effectively. It will also require medical practices to update their coding practices and risk adjustment strategies, which will require significant time and resources.
CMS-HCC Version 28 Impacts Patients
CMS implemented substantial modifications to the framework of the HCC model in Version 28 (V28), affecting RAF scores for many Medicare Advantage beneficiaries.
Nevertheless, CMS acknowledged that the changes in the proposed rule could change beneficiary risk scores with or without a change in the patient’s health status. The proposed model “results in more appropriate relative weights for the HCCs in the model because they reflect more recent utilization, coding and expenditure patterns in FFS Medicare.”
Beneficiary Risk Scores Influenced by V-28 Risk Adjustment Model
The contribution to the RAF score from diabetic disorders will not change regardless of whether the patient has uncomplicated diabetes or complications.
Example 1: The Complicated Diabetes Patient
Susan: Susan, a 68-year-old woman, has Type 2 diabetes along with peripheral neuropathy and high blood pressure.
V24: In V24, each of Susan’s conditions would contribute separate HCC codes. This would result in a relatively high overall risk score for her.
V28: V28 focuses on the overall impact of Susan’s diagnosis. The severity of her diabetes complications is prioritized over simply listing each condition separately. While still significant, her risk score may be lower than V24.
The overall impact of the proposed changes on beneficiary (patient) RAF scores will depend on several factors listed below. However, RAF scores in general, will likely decline.
Key Changes Under V28
Focus on Severity: V28 emphasizes the severity of medical conditions rather than the presence of numerous diagnoses. A patient with a few very severe conditions could have a higher risk score than someone with many less complex health problems.
Specificity: Many previously accepted diagnosis codes are no longer valid in V28. This puts more focus on accurate and clinically relevant documentation.
Overall Impact: For most beneficiaries, the switch to V28 is expected to result in slightly lower risk scores. However, individuals with very complex or severe conditions may see an increase.
CMS projects that the proposed Part C CMS-HCC model’s impact on MA risk scores in CY 2024 will be -3.12%.
This projects $11.0 billion in net savings to the Medicare Trust fund in 2024. Actual (PM) payment amounts are based on multiple additional factors.
The following 2 examples demonstrate the potential impact of the proposed changes on RAF scores (based on disease parameters)
Example 1. Significant negative impact on risk score based on disease Coefficients in a Community, Non-Dual, Aged 73- year-old female beneficiary with multiple Conditions. Only the disease coefficients for V24 and V28 are shown.
Example 2: John’s Evolving Kidney Disease
John: John is a 72-year-old with a history of chronic kidney disease (CKD). Over the past few years, his kidney function has declined.
V24: In V24, John’s risk score would change as he progressed through different stages of CKD (e.g., Stage III to Stage IV).
V28: V28 groups John’s CKD into broader categories based on severity. If his kidney disease progressed to ESRD requiring dialysis, this would trigger a new HCC category with a significantly higher risk score.
Here is an example showing how the removed codes Impact the Patient
Example 3: The Impact of Removed Codes
Martha: Martha is an 80-year-old with mild cognitive impairment and a prior history of protein-calorie malnutrition.
V24: Both conditions generated risk adjustment under V24.
V28: While cognitive impairment is still recognized, protein-calorie malnutrition is among the many codes removed from the HCC model in V28. Therefore, Martha’s risk score would be affected, likely leading to a reduction.
V28 RAF Score Calculation – How it’s Done
The calculation of the RAF score during the transition phase requires using both V24 and V28 models. The first step is calculating risk scores for the V24 and V28 CMS-HCC models. The next step is to calculate the risk score as 33% of the adjusted V28 CMS-HCC model risk score and 67% of the adjusted V24 CMS-HCC model risk score.
Using updated HCCs for calculating risk adjustment scores, this new model will be phased in over the next 3 years, as shown below.
Payment Year (PY) 2024: The 2024 risk scores will be blended, with 67% calculated using the current (2020 or v24) risk adjustment model and 33% calculated using the finalized 2024 (v28) risk adjustment model
PY Year 2025: For 2025 risk scores, 33% will be calculated using the current (2020 or v24) risk adjustment model, and 67% will be calculated using the finalized 2024 risk adjustment model
PY 2026: 100% of 2026 risk scores will be calculated using the finalized 2024 (v28) risk adjustment model
Comparison between V24 to V28
Below are some of the prime parameters that differentiate V24 from V28
a). Expansion of payment categories: Payment categories grew from 86 to 115.
b). Reduction in diagnostic codes: The number of diagnostic codes decreased from 9,797 diagnostic codes to 7,770 diagnostic codes, reflecting the addition of 209 codes and the removal of 2,236. These changes were driven by ICD-10 clinical updates and Principle 10 updates.
c). Reorganization of categories: Well-known categories like 107 and 108 are now categorized as 263, 264, and 267, primarily including codes related to atherosclerosis with complications like ulceration or Gangrene.
d). Changes In depressive coding
- Depression, just like vascular, had over 50% of codes removed. Codes are now limited to moderate or severe major depression.
- Mild, unspecified, or in remission, including bipolar in remission, are now nonpayment and physicians helping create V28 agreed that anyone having a relapse would be reflected with a more severe active disorder.
e). Added diagnostic codes
Notable additions include 20 codes related to benign carcinoid tumors and codes for anorexia and bulimia nervosa, post-polio syndrome, and severe persistent asthma, among others.
Source: CMS
Challenges Posed by New Risk Adjustment V28 Model
Throughout the last ten years, CMS’s ongoing adjustments to Risk Adjustment models, submission procedures, and regulatory frameworks have introduced complexities in some operational areas for health plans. The new CMS-HCC model (V28) launch in 2024 has only heightened concerns.
Some industry veterans believe the alterations made to the CMS model in V28 disregarded input from both plans and providers, suggesting a primary objective of mitigating discretionary coding variations.
Also, the lack of collaborative engagement in the formulation of V28 prompts inquiries into its capacity to portray patient risk profiles precisely. Moreover, the number of HCC categories increases from 86 to 115 but assigns risk scores to 2,294 fewer codes.
With New Model (V28) comes New Opportunities
The transition from V24 to V28 within the Medicare Advantage risk adjustment model carries significant implications for both RAF scores and financial outcomes. According to CMS, this transition is anticipated to yield a noteworthy -3.12% impact on MA risk scores by CY 2025, resulting in substantial net savings of $11.0 billion to the Medicare Trust fund in 2024. Furthermore, the new RADV final rule underscores the critical importance of accurately identifying HCCs to determine RAF scores and reimbursement. With adjustments in coefficients and eliminating certain conditions, precise identification of HCCs and robust retrieval of supporting evidence from unstructured medical records have become paramount.
Conclusion
The CMS-HCC Model V28 represents a pivotal change in the risk adjustment landscape, with significant implications for health plans. RAAPID is dedicated to supporting health plans through this transition, providing innovative solutions that enable them to navigate these changes effectively. By partnering with RAAPID, health plans can confidently approach the CMS-HCC Model V28, optimizing their financial outcomes while delivering high-quality care to their members.
Explore RAAPID’s solutions today and ensure your organization is prepared for the CMS-HCC Model V28. Together, we can drive success in the era of value-based healthcare.
