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. 2004 Summer;25(4):119-41.

Risk adjustment of Medicare capitation payments using the CMS-HCC model

Gregory C Pope  1 , John Kautter, Randall P Ellis, Arlene S Ash, John Z Ayanian, Lisa I Lezzoni, Melvin J Ingber, Jesse M Levy, John Robst
Affiliations

Risk adjustment of Medicare capitation payments using the CMS-HCC model

Gregory C Pope et al. Health Care Financ Rev. 2004 Summer.

Abstract

This article describes the CMS hierarchical condition categories (HCC) model implemented in 2004 to adjust Medicare capitation payments to private health care plans for the health expenditure risk of their enrollees. We explain the model's principles, elements, organization, calibration, and performance. Modifications to reduce plan data reporting burden and adaptations for disabled, institutionalized, newly enrolled, and secondary payer subpopulations are discussed.

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Figures

Figure 1
Figure 1. Hierarchical Condition Categories Aggregations of ICD-9-CM Codes
Figure 2
Figure 2. Hierarchical Condition Categories Coronary Artery Disease Hierarchy
Figure 3
Figure 3. Clinical Vignette for Hierarchical Condition Categories Classification 79 Year Old Female with AMI, Angina Pectoris, COPD, and Renal Failure
Figure 4
Figure 4. Model Explanatory Power as a Function of Number of Hierarchical Condition Categories (HCC)
See this image and copyright information in PMC

References

    1. Ash AS, Porell F, Gruenberg L, et al. Adjusting Medicare Capitation Payments Using Prior Hospitalization. Health Care Financing Review. 1989 Summer;10(4):17–29. - PMC - PubMed
    1. Brown RS, Clement DG, Hill JW, et al. Do Health Maintenance Organizations Work for Medicare? Health Care Financing Review. 1993 Fall;15(1):7–23. - PMC - PubMed
    1. Centers for Disease Control and Prevention. International Classification of Diseases, Ninth Revision, Clinical Modification (IC+CD-9-CM) Internet address: http://www.cdc.gov/nchs/about/otheract/icd9/abticd9.ht. (Accessed 2004.)
    1. Ellis RP, Pope GC, Iezzoni LI, et al. Diagnosis-Based Risk Adjustment for Medicare Capitation Payments. Health Care Financing Review. 1996 Spring;17(3):101–128. - PMC - PubMed
    1. Ellis RP, Pope GC, Iezzoni LI, et al. Diagnostic Cost Group (DCG) and Hierarchical Coexisting Conditions (HCC) Models for Medicare Risk Adjustment. Health Economics Research, Inc.; Waltham, MA.: Apr, 1996. Final Report to the Health Care Financing Administration under Contract Number 500-92-0020, Delivery Order Number 6.

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