When the Center for Medicare and Medicaid Services (CMS) announced the final rule for the HCC Risk Adjustment Model for the payment year 2024, sweeping changes were announced. Transitioning from version 24 (V24) to version 28 (V28) includes significant changes to HCC codes, disease mappings, and impacts on RAF scores. Organizations have some good news as a blended percentage will be used for the 2023 data collection year. Percentages will include a blend of 33% for the V28 model and 67% for the prior V24 model. Further, V28 will be deployed at 67% in 2024 and fully phased in at 100% in 2025 diagnosis collection years. Now is the time to review documentation to achieve accurate code assignments.

Since V24 was originally structured based on ICD-9-CM codes, it lacked the specificity of ICD-10-CM. Even though V24 was transitioned to ICD-10-CM, because its basis was in ICD-9-CM it could not reap the benefits of the new code set. V28 will fully transition HCCs to ICD-10-CM, therefore, enhancing its ability to fully incorporate the specificity of the code set. 

Changes to HCCs

V28 increases HCCs by 268 new ICD-10-CM codes, however, 40% of the new codes are reflected in conditions not found in Medicare Advantage patients. Chapter 16 of ICD-10-CM (Certain conditions originating in the perinatal period) accounts for 95 new codes and an additional 17 codes are in Chapter 17 (Congenital malformations, deformations, and chromosomal abnormalities). V28 will also increase the number of payment HCCs by 29, for a total of 115 payment HCCs. These 115 HCCs have been renumbered and renamed. 

Significant diagnoses that are proposed to be added include:

• Anorexia nervosa, bulimia nervosa
• Alcoholic hepatitis with and without ascites
• Malignant pleural effusion
• Obstruction of the bile duct
• Severe, persistent asthma
• Toxic liver disease with hepatitis

In contrast, over 2,000 ICD-10-CM codes that mapped to payment in V24 will no longer map to an HCC in V28. CMS decided to eliminate HCCs if:

• The conditions did not accurately predict costs
• The coefficients were small
• The conditions they represent are uncommon
• Conditions that did not have “well-specified” diagnostic coding criteria

Significant eliminations include:

• Protein-calorie malnutrition and Cachexia
• Major depressive disorder is specified as mild or in remission
• Certain Polyneuropathy Conditions (including Guillain-Barre Syndrome)
• Certain Angina Pectoris
• Certain peripheral vascular disease conditions
• Aortic aneurysms without rupture
• Dependence on renal dialysis

Coefficient Changes

CMS utilizes a process referred to as constraining, where related HCCs are given the same coefficients. The best example of constraining can be found in the Diabetes diagnoses category. The contribution of the RAF score from diabetic disorders will not change regardless of whether the patient has uncomplicated diabetes or diabetes with complications. For example, a patient with diabetes with peripheral vascular disease in V24 has coefficients of 0.302 + 0.288. In V28, that same patient receives a coefficient of only 0.166.

RAF Score Changes

CMS does acknowledge that these changes could change beneficiary risk scores, even if there is no change in the patient’s health status. As an example, a patient receiving payment for their dependence on renal dialysis may remain on dialysis; but no longer receive payment for that condition. CMS maintains that V28 will result in a more appropriate relative weight, reflecting recent utilization, coding, and expenses.

The overall impact of the proposed changes on beneficiary RAF scores will depend on several factors such as patient complexity, age, and geography.  However, in general, scores will almost certainly decrease. CMS projects that the CY 2024 impact on MA risk scores are projected to decrease by -3.12%. This will translate into a $11.0 billion net savings to the Medicare Trust Fund in 2024.

There is no doubt that V28 and the recently published RADV final rule will impact the healthcare industry at large. Organizations and providers need to prepare today to implement these changes.  Continual benchmarking of health statuses and analysis of trends will impact everyone differently. 

The best defense is a good offense. Invest now in technologies and partners to create a base-level understanding of organizational opportunities. At CSI Companies we are here to assist you in this time of transformation. Our products and services in clinical documentation improvement, physician education, risk adjustment, and coding are the perfect combinations for a complete assessment of your individual needs.

By: Lou Ann Wiedemann

Director Provider Coding, MS, FAHIMA, RHIA, CHDA, CDIP

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