Hierarchical Condition Categories (HCCs) are a structured system used by the Centers for Medicare & Medicaid Services (CMS) to predict the future healthcare costs of patients enrolled in programs like Medicare Advantage. This model translates clinical diagnoses into financial risk scores, providing a standardized method for determining payments. The system categorizes a patient’s health status, focusing on chronic and severe acute conditions, to anticipate their complexity and resource utilization. The precise number of codes is not fixed, as it depends entirely on the specific version of the CMS risk adjustment model being used.
What are Hierarchical Condition Categories?
Hierarchical Condition Categories are groupings of medical diagnoses that share similar clinical characteristics and are expected to incur similar healthcare expenditures. The primary purpose of the model is to implement a risk adjustment methodology, ensuring that health plans receive appropriate compensation for managing patients with higher disease burdens. This process is designed to prevent health plans from avoiding sicker patients and to accurately reflect the complexity of the population they serve.
The term “Hierarchical” is a defining feature of the system. It means that among a group of related conditions, only the most severe diagnosis is used for calculating the financial risk score. For example, if a patient has both uncomplicated diabetes and diabetes with severe complications, the model only counts the complication-related code. This structure prevents redundant coding and ensures the risk score reflects the patient’s overall clinical severity.
The Source: Mapping ICD Codes to HCCs
The process of assigning an HCC begins with the clinician documenting a patient’s diagnosis using a standardized coding system. The current clinical coding system in the United States is the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM). This system contains tens of thousands of specific codes representing every known illness, injury, and cause of death.
These ICD-10-CM codes are then run through a specialized crosswalk or mapping tool created by CMS to determine the corresponding HCC. The mapping process translates the highly detailed clinical information into a much smaller, more manageable set of financial risk categories. Importantly, not every ICD-10-CM code maps to an HCC; the model focuses only on conditions that are chronic, severe, or significantly predictive of high future healthcare costs.
How CMS Risk Models Define the Count
The answer to how many HCC codes exist is not a single number because the CMS model is updated periodically to reflect current medical practice, treatment costs, and coding patterns. These updates, often referred to by version numbers, change the count of condition categories and the diagnosis codes that map to them. For example, the CMS-HCC model Version 24 (V24) contained 86 distinct Hierarchical Condition Categories.
The most recent overhaul, model Version 28 (V28), represents a substantial shift. CMS increased the total number of HCC categories from 86 in V24 to 115 in V28, allowing for more granular distinctions. Conversely, the total number of ICD-10-CM diagnosis codes that map to any HCC category saw a reduction. This dropped from approximately 9,797 codes in the previous model to about 7,770 in the new version. This change indicates a policy focus on retaining only the diagnoses most strongly correlated with high future costs.
Why the Count Matters to Healthcare Funding
The number and type of HCCs assigned to a patient directly dictate the financial payment a health plan receives from CMS. Each HCC is associated with a specific numerical weight, and the sum of these weights, along with demographic factors, determines the patient’s Risk Adjustment Factor (RAF) score. A higher RAF score signifies a more complex patient population and justifies a higher capitated payment to the health plan.
This financial mechanism means that accurately capturing every qualifying condition is paramount for health plans and providers. If a patient’s chronic conditions are not properly documented and translated into HCCs, the resulting RAF score will be artificially low, leading to underpayment for the actual cost of care. The total count of HCCs, and the specific codes that qualify, underpins the financial sustainability of healthcare organizations that manage high-risk patient populations.