Understanding the Changes in the CMS-HCC Model V28

Risk Adjustment Factor and CMS-HCC Model

The Centers for Medicare and Medicaid Services (CMS) uses Hierarchical Condition Category (HCC) risk adjustment models to estimate future healthcare costs for Medicare Advantage patients based on health status and demographic factors. The Risk Adjustment Factor (RAF) score determines the amount paid by CMS to the health plan per patient. Medicare Advantage Organizations (MAOs) are paid at a higher rate for patients who have multiple conditions and conditions with greater levels of severity, as their RAF scores and anticipated costs of care will be higher.

The CMS-HCC V28 risk adjustment model represents a significant evolution in Medicare Advantage risk adjustment, with direct implications for reimbursement accuracy and financial performance. CMS began phasing in V28 in 2024, blending with V24. The transition is complete, and MA plans are now fully paid under V28 per the following timeline:

• 2024: 33% V28 / 67% V24
• 2025: 67% V28 / 33% V24
• 2026: 100% V28

Medicare Advantage risk adjustment has transitioned fully to the CMS-HCC Version 28 (V28) model as of payment year 2026, replacing the prior Version 24 (V24) model. CMS finalized this updated model in the 2024 Rate Announcement, incorporating significant recalibration and clinical reclassification of HCCs. The V28 model reflects more current fee-for-service data, using 2018 diagnoses and 2019 expenditures compared to 2014 diagnoses and 2015 expenditures in V24, and introduces a methodology aligned with ICD-10-based classification. This transition represents a shift toward more clinically accurate and data-driven risk adjustment, with ongoing CMS updates expected to further modernize calibration inputs in future payment years.

How does CMS-HCC Model V28 Impact Risk Adjustment and RAF Scores from 2026?

CMS-HCC V28 represents a fundamental shift in Medicare Advantage risk adjustment from a volume-driven, legacy ICD-9-based model to a clinically refined, ICD-10-aligned framework. The model expands HCC categories while reducing the number of payable diagnoses, recalibrates condition weights using more current data, and introduces logic to prevent overlapping risk capture. The result is a more precise—but generally lower—risk score environment that places increased emphasis on documentation specificity, clinical accuracy, and technology-enabled coding strategies.

The significant changes in CMS-HCC V28 include:

• An increase in the number of HCC categories from 86 to 115.
• A decrease in the number of HCC codes (ICD-10-CM codes) from 9797 to 7770.
• Approximately 2294 codes have been deleted and 268 codes have been added.
• Re-numbering and changing HCC categories.
• Changes to the HCC coefficient values (risk scores that map to each HCC category).

Constraining

CMS uses a process known as constraining to reclassify HCC mappings in V28, where related HCCs are given the same coefficients. Diabetes can serve as an example to understand how constraining affects the RAF score. Diabetic disorders contribute the same to the RAF score whether the patient has uncomplicated diabetes or diabetes with complications. However, type 2 diabetes mellitus without complications (E11.9), receives a slightly higher risk score in V28 than it currently does in V24 (for example, from 0.105 to 0.166). A patient with diabetes with peripheral vascular disease in V24 has risk scores of 0.302 + 0.288 (0.590). In V28, the same patient receives a risk score of only 0.166. Overall, this will result in a significant reduction in the RAF score for patients with acute or chronic complications from diabetes.

CMS states that V28 will result in a more appropriate relative weight, reflecting recent utilization, coding, and expenses. Additionally, the CY 2024 impact on MA risk scores is projected to decrease by -3.12%. This will translate into a $11.0 billion net savings to the Medicare Trust Fund in 2024.

Documentation is Key

Accurate risk adjustment has always depended on the specificity of documentation and diagnostic coding. HCC model V28 will require even greater specificity in documentation and code assignment to ensure that the true level of the Medicare Advantage patients’ illness severity is captured and provides CMS with coded data for future analysis in model recommendations.

RAF Score Calculation

The calculation of RAF score during the transition phase requires the usage of both V24 and V28 models. The first step is to calculate risk scores for both the V24 and V28 CMS-HCC models. The next step is to calculate the risk score as the sum of 33% of the adjusted V28 CMS-HCC model risk score and 67% of the adjusted V24 CMS-HCC model risk score.

Example: Jane is a 93-year-old female who has diabetic amyotrophy, fatal familial insomnia, CKD stage 3A, and toxic liver diseases with hepatic necrosis and coma. The table below illustrates how the RAF score is computed.

Driving Performance Under CMS-HCC V28

With CMS-HCC V28 now fully in effect, healthcare organizations must adapt to a new risk adjustment environment where coding specificity, documentation accuracy, and performance consistency directly impact reimbursement outcomes. Conditions that are considered as HCC in one version may not be in the other. Additionally, even if a diagnosis is an HCC in both versions, the actual HCC and RAF scores may be different.

To perform effectively under V28, health plans and providers should identify the top HCCs among their patient population to examine and understand the potential impact of the two model versions. Investing in technologies that allow for more specific documentation, as well as accurate and efficient coding of large volumes of clinical documents will be vital strategies to enable health plans, providers, and other stakeholders to effectively manage their risk adjustment program.

Contact us to help you optimize performance under CMS-HCC V28 to protect RAF performance, reduce revenue risk, and sustain financial stability.