HealthFebruary 08, 2023

A first look at the 2024 CMS Advance Notice

The 2024 Medicare Advantage Advance Notice proposes significant changes for the CMS-HCC Risk Adjustment Model for CY2024.

Last week was a big week for anyone working in the Medicare Risk Adjustment space. Earlier in the week CMS published the long-awaited announcement on the final rule for RADV (Risk Adjustment Data Validation) Audits. Two days later, we got our first look at the “2024 Advance Notice with Proposed Payment Updates for the Medicare Advantage and Part D Prescription Drug Programs” notice and the proposed changes for the CMS-HCC Risk Adjustment Model for CY2024. 

The proposed model V28 will be replacing V24. There are significant differences between these models. Let’s look at a few of the highlights:

Hierarchical condition categories restructuring

Nearly all the hierarchical condition categories (HCCs) have been renumbered and many have been renamed. The proposed model will include technical updates including restructuring of the condition categories based on ICD-10 rather than ICD-9 diagnosis codes, resulting in more granularly defined conditions within the categories.  CMS is proposing to add 268 ICD-10-CM codes to the V28 model that do not risk adjust in the V24 model, and they have added 29 more HCCs.

Even with all these additions, there are 2,027 diagnoses that will no longer map to an HCC for payment.  A few notable examples of diagnoses that are not in the V28 model: atherosclerosis of the extremities (PVD), angina pectoris, acute kidney failure, protein calorie malnutrition and toe amputations.

Another striking change is solid organ transplants were previously in HCC186 are now included in their corresponding body system condition.  For example:  Liver transplant status previously in HCC186 is now HCC62 along with other liver conditions.

Coefficient values for diabetes groups

One of the most significant proposed changes impacts coefficient values for the diabetes group. In V28, all coefficients are the same regardless of complication status.  This is a departure from previous models. Previously, diabetes with complications (acute or chronic) had a higher coefficient than an uncomplicated diabetes. For example: V24 HCC18 Diabetes with chronic complications coefficient was .302 for community, nondual aged.  In the proposed V28 model the coefficient is 0.166.

Providing feedback on the proposed changes

CMS plans on finalizing these changes by April 3, 2023. How will the removed diagnoses, new groupings, additional diagnoses, and the changes in the proposed coefficients financially impact your organization? Does your organization have concerns over these proposed changes? The time to act is now! CMS will be accepting commentary through Friday, March 3, 2023. To submit comments electronically, visit the Regulations site and enter docket number “CMS- 2023-0010”.

The impact of these changes will no doubt be significant for Medicare Advantage Organizations. Explore our team's more in-depth analysis of these proposed changes which includes multiple specific examples of how the proposed changes will impact risk adjustment. Have questions on risk adjustment coding in the meantime? Reach out to us!

Read the Health Language team's in-depth analysis of how CMS-HCC Version 28 will impact RAF scores and explore how health companies can improve risk adjustment workflows with advanced technology.

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