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

John Kautter; Gregory Pope; Melvin J. Ingber; John Michael. Robst; Gregory Pope; John Kautter; RP Ellis; AS Ash; JZ Ayanian; LI Iezzoni; Melvin J. Ingber; JM Levy; John Robst

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

Pope, G., Kautter, J., Ellis, RP., Ash, AS., Ayanian, JZ., Iezzoni, LI., Ingber, M., Levy, JM., & Robst, J. (2004). Risk adjustment of Medicare capitation payments using the CMS-HCC model. Health Care Financing Review, 25(4), 119-141. http://www.cms.hhs.gov/HealthCareFinancingReview/Downloads/04summerpg119.pdf

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Abstract

This article describes the CMS hierarchical condition categories (HCO 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