White Papers / Perspectives

Analysis: the financial impact of the 2019 CMS-HCC risk adjustment model

Each year, the Centers for Medicare & Medicaid Services (CMS) announces updates to the Medicare program, often including changes to how risk scores are calculated for Medicare Advantage (MA) plans. CMS’s changes effective for the 2019 payment year encompassed several mandates from the passage of the 21st Century Cures Act, including the addition of several new risk-generating hierarchical condition categories (HCCs) as well as updates to risk score coefficients.

To assess the potential impact of these newly included HCCs and updated coefficients, Cotiviti’s data scientists applied both the new 2019 CMS-HCC (V23) model and the 2017 CMS-HCC (V22) model to 2017 claim data for three MA plans of different sizes. Here, we summarize what we learned, including: 

  • How prevalent the newly included HCCs are among Medicare health plan members
  • How an MA plan’s Risk Adjustment Factor (RAF) is affected with the introduction of the new 2019 payment model
  • How disparities still persist between RAPS and EDS risk scores

We also offer our own set of recommendations to assist MA plans in mitigating the impact of these changes.

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