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Provider Manual

Risk Adjustment and Hierarchical Condition Category Coding

Last Updated on June 17, 2019

Risk Adjustment and Hierarchical Condition Category (HCC) coding is a payment model mandated by the Centers for Medicare and Medicaid Services (CMS) in 1997.  Implemented in 2003, this model identifies individuals with serious or chronic illness and assigns a risk factor score to the person based upon a combination of the individual’s health conditions and demographic details.  The individual’s health conditions are identified via International Classification of Diseases – 10  (ICD –10) diagnoses that are submitted by providers on incoming claims.  There are more than 9000 ICD-10 codes that map to 79 HCC codes in the Risk Adjustment model. 

CMS requires documentation in the person’s medical record by a qualified health care provider to support the submitted diagnosis.  Documentation must support the presence of the condition and indicate the provider’s assessment and/or plan for management of the condition.  This must occur at least once each calendar year in order for CMS to recognize the individual continues to have the condition.       

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CMS Risk Adjustment


Brenda Anderson
Revenue Management Educator
Security Health Plan 
Telephone: 715-221-9598