The Centers for Medicare & Medicaid Services (CMS) regularly updates its regulations to ensure that healthcare payments reflect the real-world health needs of patients. The latest major update is the CMS-HCC Version 28 (V28) risk adjustment model. Think of it as a significant software update for how Medicare Advantage (MA) plans are paid.

The main goal of this model is to more accurately predict healthcare costs based on a patient's health status. It uses a system of Hierarchical Condition Categories (HCCs) to classify diagnoses. The healthier a patient is, the lower their risk score. The more complex their health needs, the higher their risk score, which results in higher payments to the MA plan to cover their care.

The transition from the previous model, V24, to V28 isn't just a minor tweak. It's a fundamental shift in how risk is calculated. CMS has overhauled the underlying data and logic to better align with current healthcare practices and costs.

One of the biggest changes is the source of the diagnostic data. V28 is based on data from 2018 diagnoses and 2019 expenditures, making it more current than V24, which used data from 2014-2015. This update ensures the model reflects more recent medical coding and treatment patterns.

This push for specificity has led to significant revisions in the HCCs themselves. The number of HCC codes has increased, but more importantly, how they are mapped from ICD-10-CM diagnosis codes has changed. Some diagnoses that previously mapped to an HCC in V24 no longer do in V28, while other mappings have been refined to capture patient complexity more accurately.

Another crucial change involves how certain codes are handled. For example, V28 removes HCC mappings for many codes that are prone to discretionary coding but have a low impact on health costs, such as certain types of uncomplicated diabetes. This forces healthcare providers to be more precise and thorough in their documentation to justify risk scores.

CMS understands that such a significant change requires an adjustment period. To ease the transition, the implementation of V28 is being phased in over three years.

This phased approach gives Medicare Advantage organizations and healthcare providers time to adapt their systems, train their staff, and refine their clinical documentation practices. By 2026, the transition will be complete, and risk scores will be calculated entirely using the V28 model, based on data from 2025.

Understanding this new landscape is the first step for any organization involved in Medicare Advantage. The shift to V28 emphasizes the need for precise, accurate, and thorough clinical documentation more than ever before.