Health Affairs January 9, 2023
A growing range of policy discussions correctly assert that the current Centers for Medicare and Medicaid Services’ (CMS) risk-adjustment system needs modernization, reflecting its long history and evolution. While refined over time, the same CMS-Hierarchical Condition Categories (HCC) risk-adjustment model has been used for nearly 20 years. The same essential model is employed in Medicare Advantage (MA) and applied to nearly all of CMS’s longitudinal value-based payment models including both the Medicare Shared Savings Program and the Innovation Center’s accountable care organizations (ACOs) including the ACO Realizing Equity, Access, and Community Health (REACH) Model.
Technology and health care have changed a lot in nearly 20 years. While the current CMS-HCC risk-adjustment model needs reform, risk adjustment as a policy matter...
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