Understanding the HHS-HCC Risk Adjustment Model

Understanding the HHS-HCC Risk Adjustment Model

Understanding the HHS-HCC Risk Adjustments Model (HHS-RADV) is an essential first step to improving your practice’s reimbursement rates. The model requires healthcare providers to document certain chronic conditions and severe diagnoses to predict future health costs accurately. Inaccurate diagnoses can impact your patient’s care and outcomes and negatively impact reimbursement for ongoing care.

HCC coefficient estimation groups

HCCs, or Hospital and Health Services-Hierarchical Condition Categories, are statistically manageable illnesses. HCCs are based on valid ICD9-CM diagnosis codes from physicians, hospital inpatients, and outpatients. 264 HHS-HCCs are used in risk adjustment models. Out of these, 127 have coefficients, each reflecting a quarter of the total number of ICD9-CM codes.

HHS is currently finalizing a policy to combine HCCs in adult risk adjustment models with equal coefficients. The HCCs will then be grouped into groups based on their failure rates. Beginning with the 2019 benefit year, HHS-RADV will refine its calculation of error rates to account for the new Super HCC groupings.

The hhs-hcc risk adjustment model can predict the annualized liability of a health plan for a typical enrollee based on age, sex, and various diagnoses. Currently, HHS uses separate models for infants, children, and adults. The child and adult models include age and sex demographic categories and diagnoses. HHS has added a few factors to these models, including the duration of enrollment and specific prescription drug categories.

Application of HHS-RADV Results to Issuers

The HHS-RADV process has been refined based on stakeholder feedback. The new methodology aims to reduce the impact of miscoding HCCs on an issuer’s risk score. It is intended to help issuers adjust their risk scores to reflect their enrollees’ health status accurately.

The HHS-RADV process is designed to provide issuers with valuable insight into their own risk and performance. The HHS-RADV results adjust risk adjustment transfers in state market risk pools and issuers’ risk scores. The program was piloted during the 2015 and 2016 benefit years. Participating issuers received outstanding 2016-RADV results.

The HHS-RADV rule finalizes standards related to the HHS-RADV process. It also transitions from prospective to retrospective application. Issuers must adjust risk scores and transfer amounts based on the 2021 HHS-RADV results.

Modification of HHS-RADV 

One of the major criticisms of the HHS-RADV is its reliance on the error rate of non-outlier issuers. The adjustment for issuers with negative error rates has the potential to impact non-outlier issuers significantly. Still, some commenters have asked the agency to avoid adjusting issuers with negative error rates. Those who are opposed to the new adjustment plan have two main concerns.

One of these concerns is that issuers with high error rates may have difficulty meeting their target HCCs. Therefore, HHS should adjust issuers based on the risk rate of this population. By making these adjustments, issuers can recover funds lost to their competitors.

CMS’ proposed changes to the HHS-RADV program would address these issues. The proposed changes would improve the integrity of the HHS-RADV program by reducing the incentive for insurers to under-report diagnoses. The changes would also reduce the risk of under-adjusting newly-entrant payers’ in-state market risk pools.

Impact of COVID-19 Public Health Emergency on the Timeliness of Implementation

Implementing COVID-19 will have significant impacts on health services and public health activities. The urgency of this public health emergency is critical because COVID-19 is easily transmitted in healthcare facilities and among healthcare workers. Moreover, significant unknowns are associated with this virus, which could cause long-term sequelae and immunity issues. As a result, strengthening the global health architecture is essential to combat this disease.

The Department of Health and Human Services has renewed the COVID-19 Public Health Emergency, extending the deadline for implementation of COVID-19 through October 18, 2021. The public health emergency enumerates key regulatory flexibilities and funding sources. It also provides updated guidance for the Connected Care Pilot Program.

Maine has accelerated COVID-19 testing and mitigation efforts by appointing four additional “swab and send” testing sites. In addition, the Maine Department of Health and Human Services awarded two more grants to rural hospitals to support local COVID-19 public health efforts. In addition, the Maine Department of Health also announced that it would provide up to $200 million in financial assistance to businesses affected by COVID-19.

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