Changes to the CMS-HCC 2024 risk adjustment model contain future cost predictions.

For a few years now, Hierarchical Condition Categories and their impact on coding have become trendy topics in the healthcare industry. Initially, HCCs were introduced for risk adjustment in Medicare Advantage. However, due to their efficiency, they are now expanded to other payors as well.

What makes HCC special is that they necessitate comprehensive coding to capture minute details involved in diagnosis for correct risk adjustment. CMS has made notable changes in the V28 or 2024 CMS-HCC risk adjustment model. They’ve added reliable predictors of future costs. They’ve also worked to exclude unreliable ones (CMS, 2023).

Simply put, in the CMS-HCC for CY 2024, CMS has classified the ~74,000 ICD-10-CM diagnosis codes into 266 CMS-HCC. 115 of these are included in the payment model for 2024. So, we see an increase in the number of condition categories in the 2020 CMS-HCC model, i.e., 204 MCS-HCCs and 86 in payment.

This expansion of categories is done to cater to the high levels of detail in ICD-10-CM diagnosis codes. Overall, as compared to the V24 or 2020 model, the V28 or 2024 model includes around 20% fewer ICD-10-CM codes. This is due to the exclusion of diagnosis per CMS’ risk adjustment principles.

Statistical Summary of CMS-HCC 2020 and CMS-HCC 2024

  CMS-HCC 2020 CMS-HCC 2024
FY22/23 ICD-10 – total 73,926* 73,926*
FY22/23 ICD-10 codes mapped to payment HCCs 9797 (13.3%) 7770 (10.5%)
FY22/23 ICD-10 codes mapped to non-payment HCCs 64129 (86.7%) 66,156 (89.5%)
Added   209
No longer mapped in the 2024 CMS-HCC model   2236
No longer mapped – ICD-10 clinical updates   2161 (96.6%)
No longer mapped – Principle-10 focused updates   75 (3.4%)
Total HCCs 204 266
HCCs – payment 86 (42.2%) 115 (43.2%)
HCCs – non-payment 118 (57.8%) 151 (56.8%)

*Number of ICD-10 diagnosis codes changes in every fiscal year.

Noteworthy Changes and Updates to The CMS-HCC Risk Adjustment Model for CY2024

To make it easy for you, we’ve included some of the most significant updates in multiple categories included in the CMS-HCC 2024 risk adjustment model. These updates are going to affect coding teams working for different medical billing teams. So, it is important to get acquainted with them.

Vascular disease

We see 3 new HCCs included (263, 264, and 267) by reconfiguring HCCs 107-108 in the CMS-HCC model for 2024.

The latest additions in the model emphasize more on severe cases of atherosclerosis of extremities. It is a disease of the peripheral blood vessels described by narrowing and hardening of the arteries resulting in a decrease in blood flow to the legs and feet.

Less extreme symptoms are assigned to lower-level HCCs.

Metabolic Diseases

The group relating to metabolic diseases has grown from 3 payment HCCs in the 2020 model to 4 in the 2024 CMS-HCC model.

Lysosomal storage disorders that are generally considered quite costly are separated into a new HCC (49).

Also, based on the clinical and cost factors, metabolic and endocrinal disorders were split into HCCs 50 and 51.

Some other disorders that didn’t cost too much or indicating lab test results were assigned to non-payment HCCs.

Cardiovascular Diseases

The cardiovascular disease group in the said model has grown to 10 payment HCCs from 5 in the previous model of 2020.

Congestive Heart Failure, HCC 85, was separated into 5 payment HCCs (222, 223, 224, 225, 225). This update is based on the difference in cost and clinical severity of the disease.

Heart Transplant Status/Complications, HCC 221, was included in the hierarchy.

Cardiomyopathy/Myocarditis, HCC 227, was separated as a different HCC.

Blood Disease

We see the blood disease group expanding to seven payment HCCs in CMS-HCC for 2024 as compared to only 3 in the 2020 model.

Due to their clinical specificity and severity, 3 conditions, coagulation defects, hemorrhagic conditions, and purpura, were assigned to payment HCC 112 or non-payment.

Also, immune disorders were separated into two HCCs, 114 and 115. HCC 14 was assigned the expensive and clinically severe condition, while other conditions were added to HCC 115.

Amputation

The amputation disease group in CMS-HCC 2020 was restructured in CMS-HCC 2024. It was done to account for complications and cover the severity and costs of lower limb amputations.

Absence codes for finger and toe were assigned to non-payment HCC. This rearranging was done to classify the codes based on disease burden and included costs.

Neurological Diseases

The neurological disease group of model 2020 had eight HCCs, which were extended to twelve payment HCCs in the latest model.

We also saw HCC 75 split into 4 HCCs, 193, 194, 195, and 196, to describe under-predicted and chronic codes.

In the 2024 model, Myasthenia gravis codes were reconfigured into payment HCCs due to the difference in costs and clinical severity. On the other hand, Acute Guillain-Barre Syndrome was turned into a non-payment HCC.

Diabetes

In the latest CMS-HCC model, there are 4 payment HCCs for the diabetes disease group. HCC 35 holds the highest position in the hierarchy.

Diabetes diagnosis codes with complications related to glycemic control and those with no specific complications were transferred to HCC 38, the lowest payment HCC.

Glycemic control complications that are considered severely acute stay at the top with HCC 36. Few drug-induced diabetes codes were assigned to non-payment HCCs.

Kidney Disease

There are 4 payment models of the kidney disease group in the 2024 CMS-HCC model. Based on the new ICD-10 codes, HCC 138 was replaced with more specific codes, 328 and 329.

Two HCCs were removed from the payment model. These were related to acute kidney failure and dialysis status. New HCCs, 324 and 325, were introduced on account of chronic kidney disease (CKD) stages.

Phasing in CMS-HCC model 2024 or Version 28

V28 or CMS-HCC for CY 2024 will be phased in a three-year period, starting in 2023 and ending in 2025. It will be based on a blend of 33% share of V28 and 67% from the V24 model for 2023 dates of service. Next year, i.e., 2024 dates of service, V28 will be in use for 67%. It will be fully phased in next year for 2025 dates of service.

Calendar Year Version 24 Version 28
2024 67% 33%
2025 33% 67%
2026 0% 100%

We’ll see a 33% usage of V24 for 2024 dates of service, as it is fully phased at 100% for 2025 dates of service. According to the Centers for Medicare & Medicaid Services, CMS, the expansion and revision of the model will account for the latest utilization, costs, and diagnostic patterns. Apart from enhancing the payment accuracy, the revised model will also lower coding differences between MA plans and fee-for-service Medicare providers.

Some Notable Changes in V28 Version at A Glance

  • Addition of more HCC categories from 86 to 115.
  • Lowered number of HCC codes (ICD-10-CM codes) ranging from 9797 to 7770.
  • Around 2294 codes were deleted, with the inclusion of 268 codes.
  • Changing and re-numbering of HCC categories.
  • Changes made to the HCC coefficient values, which are the risk scores assigned to each HCC category, to determine the level of risk for different medical conditions.

RAF Score Calculation

To calculate the Risk Adjustment Factor or RAF score during the transition phase, necessitates the usage of both versions or models, i.e., V24 and v28. Start by calculating risk scores of both the versions of CMS-HCC models. It is followed by calculating the risk score by totaling 33% of the adjusted V28 CMS-HCC model risk score and 67% of the adjusted V24 CMS-HCC model risk score.

Final Words

The updates to the CMS-HCC 2024 risk adjustment model mark a significant shift in how healthcare providers approach coding and reimbursement. With the introduction of new predictors for future costs, CMS is taking important steps to enhance accuracy in the risk adjustment model.

Additionally, the reconfiguration of HCC categories aims to reduce inconsistencies in coding practices. As we transition to Version 28, it’s essential for medical billing teams to stay informed about these changes.

This way, they can navigate this ever-evolving landscape more effectively, ultimately enhancing patient care and ensuring that providers receive fair compensation for their services. Understanding these developments will empower healthcare professionals to adapt and thrive in a complex environment.