Title

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

Document Type

Article

Publication Date

2004

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 secondarypayer subpopulations are discussed.