Cut through the noise, find the signal: Intelligence for serious healthcare leaders
How Medicare Advantage, ACOs and ACA plans get paid for how sick their members are — and where the scrutiny is heading.
| CMS-HCC | HHS-HCC | |
|---|---|---|
| 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 |