Trends, Patterns, and Key Comparisons Related to CMS-HCC Risk Adjustment 2020 Model (V24) and 2024 Model (V28)

OBJECTIVE

Payments to Medicare Advantage (MA) organizations are risk-adjusted based on the health status of each enrollee (Social Security Act §§ 1853(a)). MA organizations are required to submit risk-adjustment data to CMS so CMS can determine each enrollee’s health status (42 CFR § 422.310(b)). Specifically, CMS maps certain diagnosis codes to hierarchical condition categories (HCCs), which CMS then uses to increase its payments to the MA organizations. In 2024, CMS began paying MA organizations according to a new model, known as version 28 (V28). The new model significantly decreased the number of diagnosis codes that map to an HCC and increased the number of HCCs that CMS uses to increase payments. CMS anticipated that the transition to the V28 model would save over $7.6 billion in payments for 2024 alone. We will analyze the diagnosis codes that MA organizations submitted to CMS for 2024 to determine whether CMS was able to achieve its intended savings.

TIMELINE

• January 15, 2026
  Announced
• Today
  Office of Audit Services In-Progress
• Est FY2028
  Estimated Fiscal Year for Project Completion

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