Our readers know that Hierarchical Condition Categories (HCCs) are groups of diagnoses. Each diagnosis is classified to a payable or non-payable HCC based on whether the diagnosis meets one or more of the 10 payment HCC principles. Each HCC has a coefficient which is like a DRG weight.
The HCC payment is the accumulation of relative factors (also like weights) for certain socio-demographic attributes of the insured individual, plus the coefficients for the HCCs that have been reported during the year for the insured individual, plus any conditions that may have an interaction that may complicate the patient’s health and healthcare, such as diabetes with chronic heart failure (CHF) or chronic lung disorder with cardio-respiratory failure and finally, an add-on coefficient if the individual has a certain number of payable HCCs.
The aggregation of the weights multiplied by what is similar to the DRG conversion factor plus some other factors creates the payment amount. So, what has HCC Version 28 done to the version (24) which had been in place since service year 2019?
Version 28 is using the claims data from 2023 to calculate the 2024 payments. But the use of Version 28 wasn’t announced until March 31, 2023. So, if no one went back and reviewed the first quarter claims, there may have been lost HCCs.
Version 28 reduced the number of diagnoses that qualified for payable HCCs. Why? Well, Version 28 used ICD-10-CM diagnoses. Yes, your read that correctly! Eight years after ICD-10 was implemented in the United States by the Centers for Medicare & Medicaid Services (CMS), CMS finally started using ICD-10-CM diagnoses for the Medicare Advantage HCCs. This also meant that the ICD-10-CM diagnoses had to be evaluated against those 10 payment HCC principles which I mentioned earlier.
Because some of the ICD-9 codes qualified for a payment HCC, the specificity of ICD-10 eliminated approximately 2,000 diagnoses.
Conditions that were eliminated included some acute conditions, but their counterpart chronic condition remained; simple conditions were eliminated but the related complex conditions remained; and some mild conditions eliminated, but major iterations of those conditions were retained and so forth.
Some common conditions that triggered payable HCCs were no longer included. So, the weights for those payment HCCs were lost.
Constraining was introduced. For some categories of HCCs, the HCCs in the same category, regardless of their progressive complexity, each were assigned the same weight. In version 24, they had progressively higher weights consistent with their complexity. So, some HCCs that were present in Version 24, remained in Version 28 but had a lessor weight. Two of these categories were relatively common: diabetes and dementia. Another hit to reimbursement.
Although Version 28 phases the new weights in with a blending of Version 24 weights for this first year through the third payment year, Medicare Advantage plans are now starting to feel the impact. And, yet another change—extrapolation. That subject will need to be a topic for another article.
Regardless, coding continues to be at the heart of HCC reimbursement with a very important role for ensuring that the most specific diagnosis is documented and coded. Coding professionals will need to function more in a clinical documentation integrity and provider education role to help providers understand that although some conditions no longer qualify for a payment HCC, the purpose of the medical record is to document all conditions considered and addressed.
Rose T. Dunn, MBA, RHIA, CPA, FACHE, FHFMA, FAHIMA is a past president and former interim CEO of AHIMA and recipient of AHIMA’s distinguished member and legacy awards. She is Chief Operating Officer of First Class Solutions, Inc.sm, a healthcare consulting firm based in St. Louis, MO. First Class Solutions, Inc.sm assists healthcare organizations enhance or transform their HIM operations, facility and physician office documentation, and revenue cycle performance and provides coding support and coding audits. Rose also is the author of Libman’s HCC Fundamentals and Auditing programs.
The Centers for Medicare & Medicaid Services (CMS) continues to expand its focus on hospital readmissions in the FY 2027 IPPS (Inpatient Prospective Payment System)
With the April 1 update, the Centers for Medicare and Medicaid Services (CMS) implemented 80 new PCS codes. To break it down, there are 24
Please log in to your account to comment on this article.
Breast biopsy procedures may be clinically straightforward but accurately translating them into compliant billing can be anything but. In this focused webcast, Shawn Blackburn, CPC, CPMA, CIC, CRC, CCS-P breaks down how imaging guidance, lesion count, laterality, and payer expectations all impact how these procedures should be reported. Through clear explanations and real-world scenarios, you’ll gain practical insight into aligning clinical workflows with billing requirements, avoiding common pitfalls, and ensuring your documentation supports accurate reimbursement and compliance.
Gain clarity and confidence in OB‑GYN coding with this expert‑led webcast featuring Sherri L. Clayton, RHIT, CSS. You’ll learn how to apply global maternity package rules accurately, select the right CPT codes for procedures and visits, and identify documentation gaps that lead to denials. With practical guidance and real examples, this session helps you strengthen compliance, reduce audit risk, and ensure accurate reimbursement for women’s health services.
Uncover essential coding insights with nationally recognized coding authority Kay Piper, RHIA, CDIP, CCS. Through ICD10monitor’s interactive, on‑demand webcast series, Kay walks you through the AHA’s 2026 ICD‑10‑CM/PCS Quarterly Coding Clinics, translating each update into practical, easy‑to‑apply guidance designed to sharpen precision, ensure compliance, and strengthen day‑to‑day decision‑making. Available shortly after each official release.
Uncover critical guidance on the ICD-10-CM/PCS code updates. Kay Piper reviews and explains ICD-10-CM/PCS coding guidelines in the AHA’s fourth quarter 2026 ICD-10-CM/PCS Coding Clinic in an easy to access on-demand webcast.
Traditional utilization management models can no longer keep pace with regulatory shifts, payer scrutiny, and operational pressures. In this webcast, Tiffany Ferguson, LMSW, CMAC, ACM, ACPA-C, introduces an Adaptive Model strategy that modernizes UM through role specialization, technology-driven workflows, and proactive, team-based processes. Attendees will learn how to restructure programs to improve efficiency, strengthen clinical collaboration, and enhance financial performance in a rapidly changing healthcare environment.
Federal auditors are intensifying their focus on inpatient psychiatric facilities, using advanced data analytics to spotlight outliers and pursue high‑dollar repayments. In this high‑impact webcast, Michael Calahan, PA, MBA, Compliance Officer and V.P., Hospital & Physician Compliance, breaks down what regulators are really targeting in IPF-PPS admissions, documentation, treatment and discharge planning. Attendees will learn practical steps to tighten processes, avoid common audit triggers and protect reimbursement and reduce the risk of multimillion-dollar repayment demands.
In this timely session, Stacey Shillito, CDIP, CPMA, CCS, CCS-P, CPEDC, COPC, breaks down the complexities of Medical Decision Making (MDM) documentation so providers can confidently capture the true complexity of their care. Attendees will learn practical, efficient strategies to ensure documentation aligns with current E/M guidelines, supports accurate coding, and reduces audit risk, all without adding to charting time.
Join Ronald Hirsch, MD, FACP, CHCQM for The PEPPER Returns – Risk and Opportunity at Your Fingertips, a practical webcast that demystifies the PEPPER and shows you how to turn complex claims data into actionable insights. Dr. Hirsch will explain how to interpret key measures, identify compliance risks, uncover missed revenue opportunities, and understand new updates in the PEPPER, all to help your organization stay ahead of audits and use this powerful data proactively.
Happy HIP Week! Sign up to win free access to our 2026 Coding Clinic Update Webcast Series! Click here to learn more →
Prepare for the 2025 CMS IPPS Final Rule with ICD10monitor’s IPPSPalooza! Click HERE to learn more
Get 15% OFF on all educational webcasts at ICD10monitor with code JULYFOURTH24 until July 4, 2024—start learning today!
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
