Medicare Advantage payments are tied directly to risk scores. If your HCC coding is incomplete, your reimbursement will be lower than it should be. If it’s inaccurate, audit exposure increases.
In 2026, this matters more than before because CMS-HCC v28 is now fully in effect. Risk scores are calculated 100 percent under the updated model. That change affects how diagnoses map to payment.
If your team hasn’t adjusted workflows to match v28, revenue gaps are likely already happening.
Let’s walk through how HCC risk adjustment coding works in 2026 and what protects revenue under the new model.
What Is HCC Risk Adjustment Coding?
HCC stands for Hierarchical Condition Category.
CMS uses the HCC model to predict expected healthcare costs for Medicare Advantage members. It assigns a Risk Adjustment Factor, or RAF score, based on:
- ICD-10-CM diagnosis codes
- Patient age
- Patient sex
- Certain interaction factors
The higher the documented disease burden, the higher the RAF score. The RAF score directly influences Medicare Advantage payment. This system only counts what is coded and supported in the documentation for that calendar year. If a chronic condition is not captured, it does not contribute to the RAF score.
That is where revenue protection begins.
CMS-HCC v28 Changes in 2026
For calendar year 2026, CMS completes the phase-in of the 2024 CMS-HCC model, also known as v28. Risk scores are now calculated fully under this structure.
Compared to the older v24 model, v28:
- Reduces the number of HCC categories
- Removes some diagnoses that previously carried risk weight
- Places greater emphasis on specificity
- Aligns more closely with current clinical evidence
Some diagnoses that mapped to HCCs under v24 no longer do under v28. That means historical coding habits may no longer produce the same RAF results.
The RxHCC model for Part D remains blended for most non-PACE organizations. PACE transitions more gradually. However, the medical HCC model for Medicare Advantage now uses v28 completely.
This is not a minor update. It changes revenue calculations.
Why Diagnosis Specificity Now Drives RAF Scores
Under v28, general diagnoses often carry less value than specific ones.
Take diabetes as an example.
- E11.9 (Type 2 diabetes without complications) generates a lower RAF value.
- E11.42 (Type 2 diabetes with neuropathy) carries a significantly higher RAF value.
The difference can be substantial. One code may contribute around 0.105 to the RAF score. The other may contribute around 0.302.
That difference reflects clinical complexity. If neuropathy exists but is not documented and coded, reimbursement does not reflect the patient’s true condition.
Specificity is no longer optional. It directly affects payment accuracy.
MEAT Criteria: The Standard for Valid HCC Capture
HCC diagnoses must meet MEAT criteria:
- Monitor
- Evaluate
- Assess
- Treat
A condition must be actively managed during the encounter. Listing it in the problem list is not enough.
For example, if a provider reviews lab results for chronic kidney disease, adjusts medication for heart failure, or evaluates diabetic neuropathy symptoms, that documentation supports HCC capture. Each chronic condition must be recaptured every calendar year. HCCs do not roll over automatically.
If documentation does not show active management, the diagnosis should not be coded for risk adjustment. Accurate documentation protects revenue. Unsupported coding increases audit risk.
RAF Score Impact and Interaction Factors
HCC coding becomes more important when patients have multiple chronic conditions.
Certain combinations create interaction factors that increase the RAF score beyond the individual diagnoses alone. For example, a patient with diabetes, chronic kidney disease, and congestive heart failure may generate a baseline RAF of 0.428. With interaction factors included, the RAF could rise to 1.327.
That difference changes Medicare Advantage reimbursement significantly. If one of those conditions is missed or undercoded, the interaction weight disappears. Payment decreases.
The math behind risk adjustment is straightforward. If the documentation supports the condition and it is coded correctly, reimbursement aligns with the expected care cost.
Revenue Risks of Undercoding
Industry estimates suggest undercoding leads to billions in lost Medicare Advantage revenue each year.
When chronic conditions are not documented annually, RAF scores drop. A small decline in RAF across a large patient population can translate into meaningful financial loss. Revenue protection does not mean coding aggressively. It means coding accurately based on what is documented and clinically supported.
The goal is alignment between patient complexity and reimbursement.
Compliance Considerations in 2026
CMS oversight continues through RADV audits and OIG reviews. Audit error rates in some samples have exceeded 30 percent.
Overcoding carries compliance risk. Undercoding carries financial risk.
Prospective chart review helps reduce both. Reviewing documentation before submission confirms that diagnoses meet MEAT standards. NLP systems may help to reveal unsupported diagnoses or overlooked capture opportunities. The documentation must justify coded HCCs through internal audits.
Hierarchy rules also apply. If two related conditions fall within the same hierarchy, only the higher-weighted HCC counts. Lower-weighted codes automatically drop.
Understanding these rules prevents both revenue loss and audit exposure.
Practical Steps to Protect Revenue in 2026
Begin by examining the HCC capture of the previous year and determining the gaps in the documentation in 2026.
Train providers on yearly recapture. There are numerous revenue holes due to missed documentation, not missed coding. Monitor RAF trends monthly. Acute declines can also reflect documentation problems, as opposed to shifts in patient condition.
Take advantage of analytics to figure out the high-risk patients who have already had their HCCs recorded previously but not this year. End-of-year surprises can be avoided through proactive review.
Final Thoughts
The 2026 HCC risk adjustment code is fully based on CMS-HCC v28. RAF scores are driven by specific documentation, precise ICD-10-CM coding, and yearly recapture.
The process of revenue protection is based on true patient complexity rather than exaggerated risk. In cases of complete documentation and correspondence to MEAT criteria, reimbursement is conducted accordingly.
To provide Medicare Advantage providers with organized HCC review, documentation audits, and prospective coding assistance, Rapid RCM Solutions assists in aligning clinical accuracy with financial performance.
The correct risk adjustment is not a mere compliance task. It is a direct guardian of revenue.
