CMS HCC Model V28: Disrupting Risk Adjustment and Redefining the Market
December 18, 2024 | 9 min read
The Centers for Medicare & Medicaid Services (CMS) has launched the Hierarchical Condition Category (HCC) Model Version 28 (V28) — a landmark update that is reshaping the risk adjustment landscape for Medicare Advantage (MA). This phased transition, beginning in 2024 and culminating in 2026, represents a strategic pivot toward more accurate, equitable, and clinically meaningful reimbursement.
At ABI Healthcare, we recognize that this shift demands more than awareness — it requires strategic adaptation, operational realignment, and robust analytics. Below, we break down what’s changing in V28, what it means for your organization, and how ABI can support your journey.
🚀 What’s New in the HCC Model V28?
The CMS V28 model introduces fundamental changes that reflect evolving clinical standards and regulatory priorities:
🔍 Expanded HCC Categories
Payment HCCs increased from 86 (V24) to 115 (V28)
2,294 diagnosis codes removed, and 268 new codes added
Greater clinical specificity and alignment with ICD-10-CM
🎯 Constrained Coefficients
Related conditions, such as various diabetes categories, now share unified coefficients
Reduces the financial incentive to over-code similar conditions
📊 Updated Calibration Data
Based on 2018 diagnoses and 2019 expenditures
Reflects more recent care utilization trends and population shifts
These updates underscore CMS’s goal to enhance accuracy, discourage overcoding, and improve the reliability of risk-adjusted payments.
💰 Financial Impact
CMS projects that the rollout of V28 will result in an average 3.12% decrease in risk scores by 2025 — potentially saving the Medicare Trust Fund $11 billion in 2024 alone. For providers and health plans, these reductions could translate into lower capitation payments, making strategic response essential.
📆 Implementation Timeline
2024: Risk scores = 67% V24 + 33% V28
2025: Risk scores = 33% V24 + 67% V28
2026: Full adoption of V28 across all plans
This phased approach offers time to prepare, but the window for action is short.
🚨 Key Diagnosis Removals
To counteract excessive coding patterns, CMS removed several high-weight HCCs, including:
HCC 21: Protein-Calorie Malnutrition
HCC 87: Angina Pectoris
HCC 108: Atherosclerosis with Intermittent Claudication
Understanding and adjusting documentation strategies for these removals is critical to avoiding reimbursement loss.
📋 Implications for Providers and Health Plans
The V28 transition presents both risks and opportunities. Success will require:
📝 Enhanced Documentation and Coding Specificity
Providers must capture complete and accurate diagnoses
Greater emphasis on clinical specificity to justify risk scores
🔄 Operational Adjustments
Risk adjustment teams should revise models, retrain coders, and reallocate resources
Coders and clinicians must adapt to new mappings and documentation templates
💸 Financial Planning
Evaluate how reimbursement shifts will affect revenue streams
Identify opportunities for recovery through improved documentation
🧩 Market Disruption: Winners and Losers
Smaller MA Plans at Risk
Organizations lacking strong coding infrastructure, analytics tools, or compliance programs may struggle to adapt — potentially prompting market consolidation.
Pressure on Value-Based Models
VBC arrangements reliant on legacy risk scores could face temporary disruptions, requiring a reassessment of performance-based contracts and shared savings targets.
🔧 Recommendations for a Successful V28 Transition
To mitigate risks and seize opportunities, healthcare organizations should:
1. Invest in Training and Education
Educate clinicians and coders on new HCC mappings
Emphasize diagnosis specificity and documentation completeness
Offer recurring refresher courses on compliance and evolving standards
2. Deploy Audit and Feedback Mechanisms
Conduct retrospective and prospective coding audits
Create feedback loops with providers to improve practices
Use audits to reinforce compliance with CMS guidelines
3. Standardize Documentation Tools
Implement diagnosis-specific EHR templates
Use real-time support tools to guide providers during patient encounters
4. Leverage Technology and Automation
Integrate Natural Language Processing (NLP) to identify missing diagnoses
Use Computer-Assisted Coding (CAC) to improve accuracy and efficiency
Optimize EHR systems for inline coding suggestions
5. Prioritize Provider Engagement
Design incentive programs for accurate documentation
Share performance dashboards to drive improvement
Reduce documentation burdens through smarter workflows
6. Facilitate Collaborative Data Sharing
Connect coders, clinicians, and data teams through shared tools
Monitor real-time risk score performance
Use analytics to surface undercoded populations and opportunities
7. Establish Strategic Partnerships
Collaborate with consultants and external auditors
Work with technology vendors to implement scalable V28-compliant solutions
8. Launch Pilot Programs
Test new documentation workflows and coding tools
Monitor outcomes using KPIs and adapt strategies accordingly
💡 How ABI Healthcare Can Help
At ABI Healthcare, we specialize in helping organizations navigate complex regulatory transitions like HCC V28 through our end-to-end services:
📊 Data Analytics & Forecasting
Model projected changes in risk scores and reimbursements
Identify under-captured diagnoses using real-world data
Uncover gaps in coding and documentation across service lines
👩⚕️ Clinical and Coding Support
Train teams on new ICD-10 codes and mappings
Conduct coding audits with detailed recommendations
Develop custom documentation workflows that align with V28
🔄 Ongoing Strategy & Monitoring
Offer continuous consulting to align with future CMS updates
Monitor risk adjustment trends with real-time dashboards
Support value-based contract optimization
📞 Let’s Talk
If your organization is preparing for HCC V28, now is the time to act. Let ABI Healthcare be your partner in building a scalable, compliant, and financially sound risk adjustment strategy.