CRC Risk Adjustment Models Overview 2 — Questions and Answers
Question 1: What is the primary purpose of hierarchies in the CMS-HCC model?
- To rank codes by billing frequency
- To eliminate redundant payment for related conditions by counting only the most severe (Correct answer)
- To organize medical specialties by cost contribution
- To establish documentation priority order
Correct answer: To eliminate redundant payment for related conditions by counting only the most severe
Hierarchies prevent double-counting within related disease groups. Only the highest-severity HCC is counted for payment.
Consider the diabetes hierarchy: HCC 17 > HCC 18 > HCC 19. If a patient has both HCC 18 and 19, only HCC 18 counts.
Question 2: Which population does the HHS-HCC model serve, and what key structural difference exists from CMS-HCC?
- Medicaid populations with 5-year age bands
- ACA marketplace populations using concurrent rather than prospective risk adjustment (Correct answer)
- Medicare Supplement populations with prescription drug data
- Federal Employee Health Benefit populations with provider specialty variables
Correct answer: ACA marketplace populations using concurrent rather than prospective risk adjustment
HHS-HCC serves ACA marketplace populations and uses concurrent risk adjustment (same-year diagnoses predict same-year costs).
Key differences include population age range, concurrent vs prospective timing, and the purpose of transferring payments between plans.
Question 3: How is the RAF score calculated for a Medicare Advantage member?
- Age and gender only
- A composite combining demographic factors, HCC weights, and disease interaction terms predicting expected costs relative to average (Correct answer)
- Total ICD-10-CM codes divided by encounters
- A quality score based on preventive care adherence
Correct answer: A composite combining demographic factors, HCC weights, and disease interaction terms predicting expected costs relative to average
The RAF starts with a demographic baseline and adds incremental weights for HCCs and applicable disease interactions. A RAF of 1.0 equals average expected cost.
Example: 72-year-old male (0.395) + HCC 18 (0.302) + HCC 85 (0.323) + CHF+CKD interaction (0.156) = RAF ~1.176.
Question 4: What was the most significant change in the CMS-HCC V24 to V28 transition?
- V28 added prescription drug data
- V28 reclassified condition categories, added new HCCs, and revised hierarchies for current medical practice (Correct answer)
- V28 eliminated disease interaction terms
- V28 changed from prospective to concurrent approach
Correct answer: V28 reclassified condition categories, added new HCCs, and revised hierarchies for current medical practice
V28 involved significant reclassification: new HCCs, splits, merges, hierarchy revisions, and recalibrated weights.
CMS phased in V28 over three years to moderate payment disruption.
Question 5: What is the 'normalization factor' in the CMS-HCC model?
- A factor adjusting for regional cost differences
- A budget-neutrality adjustment preventing total MA payments from growing solely due to coding intensity (Correct answer)
- A quality adjustment factor for Star Ratings
- A demographic correction for plan member age
Correct answer: A budget-neutrality adjustment preventing total MA payments from growing solely due to coding intensity
The normalization factor ensures aggregate payments remain budget-neutral as coding practices change.
CMS additionally applies a minimum coding intensity reduction (currently 5.91%) for the documented MA-FFS coding difference.
Question 6: How do 'new enrollee' models differ from 'continuing enrollee' models?
- New enrollee models use prior plan's diagnosis data
- New enrollees rely on demographic factors only because no prior history is available; continuing enrollees use prior year HCC data (Correct answer)
- There is no distinction between the models
- New enrollee models use higher RAF weights for uncertainty
Correct answer: New enrollees rely on demographic factors only because no prior history is available; continuing enrollees use prior year HCC data
New enrollees have no prior MA claims history, so RAF is calculated from demographics only. Continuing enrollees get the full HCC-based calculation.
This explains why comprehensive health assessments for first-year members are strategically important for enabling full risk adjustment in year two.
CRC Risk Adjustment Models Overview 2
What is the primary purpose of hierarchies in the CMS-HCC model?