CMS-HCC vs HHS-HCC Model Comparison
Side-by-side reference for leaders working across Medicare Advantage, MSSP, and ACA Marketplace programs
Source: CMS, HHS, 45 CFR Part 153, Social Security Act • Last updated March 2026
Key Takeaway
CMS-HCC and HHS-HCC share a common intellectual ancestry but differ in critical ways. CMS-HCC is prospective (last year's diagnoses predict this year's costs) while HHS-HCC is concurrent (this year's diagnoses predict this year's costs). CMS-HCC pays plans directly from government funds; HHS-HCC redistributes money between insurers in the same market. Organizations operating across both ecosystems need to understand these differences to optimize their documentation, compliance, and financial strategies.
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Statutory Authority
Social Security Act §1853; BBA 1997; MMA 2003
ACA §1343; 45 CFR Part 153
Administered By
CMS Center for Medicare
CMS Center for Consumer Info & Insurance Oversight (CCIIO)
Population
Age 65+, disabled <65, ESRD
All ages (infants through 64) in individual & small group markets
Model Type
Prospective (prior year Dx → next year cost)
Concurrent (current year Dx → current year cost)
Number of HCCs
115 (V28, 2024 model)
127 current HHS-HCC codes
ICD-10 Codes Mapped
~7,770 (V28)
~7,768
Calibration Data
Medicare FFS claims (2023 Dx / 2024 costs proposed for 2027)
Commercial claims (MarketScan employer-sponsored insurance data)
Cost Prediction
Non-drug medical spending only (Part D has separate RxHCC)
Combined medical + drug spending
Plan Liability Adjustment
No (single model applies to all MA plans)
Yes (varies by metal level: catastrophic, bronze, silver, gold, platinum)
Sub-Models
Community / institutional / new enrollee / ESRD / disabled
Adult / child / infant × 5 metal levels = 15 sub-models
Risk Transfer Mechanism
Direct payment from CMS to MA plan based on enrollee RAF score
Budget-neutral transfers between insurers in same market; high-risk plans receive, low-risk plans pay
Coding Intensity Adjustment
5.9% minimum (statutory); additional adjustments via normalization
Not applicable (concurrent model uses same-year data)
Data Submission
Encounter Data System (EDS) since 2022; RAPS legacy phase-out
EDGE server submissions from issuers
Audit/Validation
RADV audits by CMS + OIG
HHS-RADV for ACA risk adjustment
Used By MSSP/ACOs?
Yes — CMS-HCC V24/V28 used for MSSP benchmark risk adjustment
No
Used By ACO REACH?
Yes — CMS-HCC prospective for Standard ACOs; CMMI-HCC concurrent for High Needs ACOs
No
Prospective vs Concurrent
CMS-HCC uses prior-year diagnoses to predict next-year costs, creating an annual “recapture” requirement. HHS-HCC uses same-year diagnoses, eliminating the recapture problem but making scores more volatile.
Direct Pay vs Risk Transfer
CMS-HCC drives direct payments from CMS to MA plans — higher risk scores mean more revenue. HHS-HCC drives budget-neutral transfers between insurers within a state market — a zero-sum system.
Coding Intensity Adjustment
CMS-HCC applies a 5.9% mandatory reduction to offset MA plans' more intensive coding. HHS-HCC has no equivalent adjustment because its concurrent model uses same-year data from the same coding environment.
Who Uses Which Model?
CMS-HCC Is Used By
- Medicare Advantage plans (all)
- MSSP ACOs (benchmark risk adjustment)
- ACO REACH — Standard ACOs (prospective)
- ACO REACH — High Needs ACOs (CMMI-HCC concurrent variant)
- LEAD Model (beginning 2027)
HHS-HCC Is Used By
- ACA Individual Marketplace issuers
- ACA Small Group Market issuers
- State-based exchange plans
- SHOP (Small Business Health Options Program) plans