Get ready for the next big shake-up in Medicare Advantage and Part D plans! On February 1st, the Centers for Medicare & Medicaid Services (CMS) dropped the bomb with the release of the 2024 Advance Notice.
This annual document lays out the proposed payment and coverage policies for the upcoming year and is considered the blueprint for the future of MA and Part D plans. This time around, the model is getting an upgrade with the proposed V28 set to replace the current V24 in 2024.
In this article let us learn about the recent changes and how you can brace yourselves for the impact this new model will bring.
Major HCC Model Changes
The current model (V24)
- 86 Payment HCCs
- 9,797 ICD-10 diagnosis codes mapped to an HCC for payment
The proposed model (V28)
- 115 Payment HCCs
- 7,770 ICD-10 diagnosis codes mapped to an HCC for payment
- 29 new HCC codes mapped for payment
- 268 new ICD-10 diagnosis codes mapped to an HCC for payment
- HCCs removed: HCC 47, HCC 230, HCC 265, HCC 134, HCC 108
Diagnosis Codes Dropped under each HCC Category
2020 (V24) HCC Label | V24 Diagnoses Count | V28 Diagnoses Dropped (2024 Advance Notice) |
Major Depressive, Bipolar, and Paranoid Disorders | 827 | 425 |
Complications of Specified Implanted Device or Graft | 325 | 325 |
Major Head Injury | 496 | 251 |
Amputation Status, Lower Limb/Amputation Complications | 291 | 250 |
Other Significant Endocrine and Metabolic Disorders | 229 | 178 |
Vascular Disease | 330 | 146 |
Spinal Cord Disorders/Injuries | 352 | 90 |
Diabetes with Chronic Complications | 400 | 80 |
Rheumatoid Arthritis and Inflammatory Connective Tissue Disease | 648 | 71 |
Dialysis Status | 50 | 50 |
Grand Total (Unique ICD-10 Codes) | 9797 | 2269 |
The new model being proposed will feature technical updates, which include reorganizing the condition categories based on ICD-10 codes instead of ICD-9 codes.
This change will result in the addition of 268 ICD-10 diagnosis codes to the V28 model that did not previously factor into the V24 model’s risk adjustment.
Additionally, 29 new HCC conditions will be considered for risk adjustment in the V28 payment model.
Consequences of the proposed changes:
The CMS is set to finalize these changes by April 3, 2023, and is accepting feedback until March 3, 2023. The alterations will have a substantial effect on Medicare Advantage Organizations.
According to the CMS Advance Notice, along with other risk adjustment changes, CMS predicts a 3.12% decrease in the Risk score for 2024 plan payments. The decrease in payments will be caused by three primary factors:
- Reduction in Diagnosis Codes: 2269 diagnosis codes will be removed from the Hierarchical Condition Category (HCC) model, decreasing the number of ICD-10 diagnosis codes linked to HCC for payment from 9,797 to 7,770.
- Deletion of Diagnosis Codes: Complete removal of HCC conditions for payment, resulting from the deletion of diagnosis codes. For example, the proposal would eliminate
- HCC 47 (Protein-Calorie Malnutrition)
- HCC 230 (Angina Pectoris)
- HCC 265 (Atherosclerosis of Arteries of the Extremities, with Intermittent Claudication)
- HCC Coefficient Updates: CMS HCC coefficient values are being revised for split HCC conditions based on severity and utilization factors.
- One of the most significant proposed changes is the revision of coefficient values for the diabetes group. In V28, all coefficients are equal, regardless of complication status.
Preparation for Proposed Changes
Is your organization equipped with a method to evaluate the financial impact of changes in diagnoses/HCC conditions, updated hierarchy groupings, and changes in the proposed coefficients?
Health plans should:
- Analyze and benchmark current member population prevalence and provider performance in data reporting across V24 and V28 HCC payment models.
- Have tools and technology to:
- Replicate/interpret HCC risk adjustment model impacts across V24 and V28.
- Create a predictive risk score model of risk score impacts between V24 and V28 and continuously update monthly for accurate predictions.
- Understand population historical prevalence rates based on the 2024 Advance Notice model to track high and low utilizers across members
Providers should focus on the following:
Providers must stay informed of changes to HCC coding guidelines and the impact they may have on the healthcare system. This will help ensure that chronic illnesses and medications are accurately documented during annual face-to-face encounters.
All diagnosis codes should be recorded with the highest level of specificity possible. This will help ensure that all encounters are accurately submitted to the health plan, regardless of whether the provider receives a monthly capitated payment.
Providers should become knowledgeable in the standard coding principles for their specialty. This will help ensure that reported diagnosis codes are adequately supported in the medical record and help protect against potential fraud during audits.
Providers should embed both clinical and administrative support for updating V28 HCC Risk Model requirements. This will empower the team with actionable data and help ensure they are up to date with the latest requirements.
Providers should train their coding and documentation teams on the impact and nuances of the V28 HCC model across various Risk adjustment requirements. This will help ensure that the teams are equipped to handle any changes or updates.
To assess the impact and opportunities for adjustment, providers & health plans can reach out to our team at Invent Health for a quick assessment of your current programs and help you move forward confidently.
