Risk Adjustment 2025: Using Hierarchical Condition Categories to Protect Your MSSP Benchmark
At Chirpy Bird, Inc., we view risk adjustment as your practice’s financial immune system. It doesn’t grab headlines like new technologies or celebrity health trends, but when it breaks down, the consequences are immediate and costly.
As we navigate through the 2025 performance year, CMS is in the midst of its most significant shift in risk adjustment methodology in over a decade. The Hierarchical Condition Category (HCC) model Version 28 (V28) is being phased in, replacing the long-standing Version 24. This model, designed to better reflect patient complexity and improve equity, is presenting both challenges and opportunities for ACOs in the Medicare Shared Savings Program (MSSP). The urgency of understanding and adapting to these changes cannot be overstated.
If the transition to the new model is not actively managed, there is a risk of declining risk scores and decline, potential shrinkage of your MSSP benchmark, irrespective of the quality of patient care.
This guide comprehensively explains the changes in 2025, their impact on your benchmark, and the strategic actions you can take to leverage these changes.
Ready to take control of your risk strategy? We can help at ChirpyBirdinc.com.
Risk Adjustment: A Quick Refresher
Let’s start simple: CMS uses risk adjustment to level the playing field. ACOs that treat older, sicker, or more complex patients should not be penalized when compared to those treating healthier populations. Your role in this process is crucial, and your efforts can make a significant difference.
To achieve this, CMS calculates a Risk Adjustment Factor (RAF) score for each patient. That score is based largely on ICD-10 diagnosis codes, grouped into Hierarchical Condition Categories (HCCs), and used to determine expected costs.
Higher RAF scores mean CMS expects higher costs, resulting in a higher benchmark for your MSSP performance. Lower RAF scores reduce the benchmark, making it harder to demonstrate cost savings and share in program rewards.
What's Changing in 2025: The Blend of V24 and V28
CMS began transitioning to HCC Version 28 in 2024 and continues the two-year phase-in during 2025:
In 2024: RAF scores = 67% V24 + 33% V28
In 2025: RAF scores = 33% V24 + 67% V28
In 2026, V28 will be fully implemented (100%)
Why it Matters:
Because 67% of your RAF score in 2025 will be based on HCC Version 28, the effects of this model shift will be more noticeable than last year. If your organization hasn’t adjusted its documentation and coding to meet V28 standards, you’re more likely to see a decline in risk scores, and that means your benchmark could take a hit
Key Differences in V28 (Compared to V24)
More HCCs: V28 includes 115 condition categories (up from 86 in V24)
Revised coefficients: Changes in risk weights mean some conditions now have a lower financial impact
Clinical reclassification: Certain diagnoses have been re-grouped or excluded entirely
Coding specificity: V28 demands a higher level of ICD-10 precision to map to HCCs
No longer cumulative: Some conditions that used to add up for a higher RAF no longer stack the same way
Together, these changes mean that many organizations will need to retrain clinicians, revisit documentation habits, and tune up coding workflows quickly.
MSSP Benchmarks and the RAF Domino Effect
In MSSP, your benchmark represents the spending target CMS sets based on your patient population. Beat the target while meeting quality metrics, and you earn shared savings. Miss it, and you might owe CMS under two-sided risk models.
Here’s the chain reaction:
HCC coding accuracy drops
RAF scores decrease
Benchmark is reduced
Your “savings” shrink, on paper.
You lose potential revenue or trigger shared losses.
This isn’t just a coding issue; it’s a strategic priority.
Strategies to Use HCCs to Protect Your Benchmark
1. Know What Codes No Longer Count
Under V28, specific diagnoses no longer map to HCCs or now map differently. For instance, conditions like chronic kidney disease (CKD) Stage 3 no longer carry risk weights unless paired with complications or more advanced stages.
Action Step: Audit your top 20 most frequently used diagnosis codes. Compare them against the V28 model to ensure they continue to contribute to risk adjustment.
2. Train Providers on HCC Precision
Many clinicians assume their notes are good enough. But under V28, specificity is everything. “Diabetes” won’t cut it; CMS now requires precise complication details (e.g., “diabetes with neuropathy”).
Action Step: Provide quarterly training to physicians and advanced practice providers (APPs) on documentation that maps to active high-cost conditions (HCCs) under V28. Focus on chronic and high-value conditions.
3. Align Your Annual Wellness Visits with Risk Review
AWVs are a golden opportunity to revisit and recapture chronic conditions. But in many organizations, they’re treated as a separate process from risk adjustment.
Action Step: Integrate risk coding prompts into AWV templates. Use pre-visit planning to identify “recapture” opportunities based on last year’s high-cost care (HCC) codes.
4. Use the MEAT Framework for Every Diagnosis
To count under risk adjustment, every diagnosis must meet MEAT criteria:
Monitor
Evaluate
Assess
Treat
Action Step: Ensure providers are trained to include MEAT-based documentation in their notes, and confirm that your coding team reviews notes for compliance.
5. Implement Mid-Year Risk Trending
Don’t wait until December to find out your RAFs are trending down.
Action Step: Run quarterly risk adjustment score reports. Segment by clinician, clinic, and condition to identify documentation gaps.
6. Don’t Rely Solely on Technology
Natural language processing (NLP) tools and AI coders are helpful, but they aren’t a substitute for solid provider education and sound coding review.
Action Step: Utilize technology for the early detection of HCC gaps, but validate results with human review to ensure compliance with V28 criteria.
A Quick Note on Equity and Risk Adjustment
CMS is actively exploring the inclusion of Social Determinants of Health (SDOH) in future risk models. That means today’s efforts to document Z-codes and collect SDOH data will set you up for success in future MSSP cycles.
Action Step: Encourage care teams to document housing instability, transportation challenges, and food insecurity using appropriate Z-codes.
2025 Is the Make-or-Break Year for Risk Adjustment
Let’s be blunt: by 2026, the V28 model will be fully in place. If your organization doesn’t adapt now, you’ll be at a disadvantage for years to come.
But the good news? The tools, training, and tech you need already exist. You just need a partner who knows how to put them to work.
That’s where we come in.
Let Chirpy Bird Help You Protect What You've Built
At Chirpy Bird, Inc., we help healthcare providers and ACOs maximize their performance under value-based care models, without getting bogged down in regulation.
Whether you need a documentation audit, provider education, coding support, or a complete MSSP risk strategy, we’re here to help.
📩 Let’s talk about your RAF scores before CMS does.
Because in 2025, protecting your benchmark isn’t a bonus, it’s the baseline.
