The healthcare sector is always evolving. Therefore, hospitals and healthcare organizations must be updated on new regulations. The Hierarchical Condition Categories (HCCs) Risk Adjustment Model underwent significant revisions in 2025 , as announced by the Centers for Medicare & Medicaid Services (CMS). Accurate risk assessment, HCC coding, and reimbursement in the healthcare sector depend on understanding these developments.
In this article, we investigate the details of the 2025 CMS-HCC Risk Adjustment Model, discovering the modifications made to numerous disease categories and their implications. It doesn’t matter whether you are a coder or a healthcare provider; this article equips you with the knowledge that is required to guide the changing scenario of risk adjustment in healthcare.
What is the CMS-HCC Risk Adjustment Model?
The CMS-HCC model is considered a risk adjustment system used by Medicare organizations to evaluate capitation rates. The capitation refers to a fixed payment per receiver, irrespective of the healthcare services used. The goal of the CMS risk adjustment model is to account for the variable health needs of different patient populations. Additionally, by considering a beneficiary’s diagnosed conditions, the model assigns a risk score that is analyzed by ICD-10-CM codes. With the support of this score, the expected cost of care for that beneficiary is calculated.
2025 CMS-HCC Risk Adjustment Model Updates
Here is the list of important updates of different categories with the CMS risk adjustment model for the 2025 CMS-HCC model that will influence coders:
Vascular Disease
- Reconfiguring HCCs 107-108 in the 2025 CMS-HCC model has produced three new HCCs (263, 264, and 267).
- The new model maps less severe manifestations to lower-level HCCs, emphasizing more simple amounts of atherosclerosis of the arteries in the extremities.
Metabolic Diseases
- The metabolic disease group grew from three payment HCCs in the 2020 model to four in the CMS-HCC model for 2025 .
- Lysosomal storage diseases with high costs were categorized into separate HCCs (49).
- Clinical as well as financial factors led to the division of metabolic and endocrine illnesses into HCCs 50 and 51.
- Other circumstances that would have less impact on costs or show lab test findings were mapped to non-payment HCCs.
Heart Diseases
- The heart disease group grew from five payment HCCs in the 2020 model to ten in the CMS-HCC model for 2025 .
- HCC 85 Congestive Heart Failure was divided into 5 payment heart failure HCCs (222–266) on the basis of Clinical severity and cost disparities.
- The hierarchy now includes HCC 221 (Heart Transplant Status/Complications) and HCC 277; Cardiomyopathy/Myocarditis was split out as a separate HCC.
Blood Disease
- From three payment HCCs in the 2020 model, the Blood illness group grew to seven in the CMS-HCC model for 2025 .
- Based on clinical severity and specificity, coagulation abnormalities, hemorrhagic disorders, and purpura were mapped to either payment HCC 112 or non-payment HCC.
- Immune conditions were divided into two HCCs. HCC 114 consisted of more expensive and clinically severe ailments, whereas HCC 115 consisted of other specific disorders.
Amputation
- The amputation disease category from the 2020 CMS-HCC model for 2025 is reorganized to account for any early problems or continuing expenses related to lower limb amputation.
- Mapping acquired absence codes for the toe and finger to non-payment HCC allowed for appropriate conditions classification based on predicted costs and disease load.
Neurological Diseases
- From eight payment HCCs in the 2020 model, the neurological disease group grew to twelve in the CMS-HCC model for 2025 .
- Reconfigured HCC 75 into HCCs 193-296 according to chronic and underpredicted codes.
- Acute Guillain-Barre Syndrome is no longer covered by insurance. The clinical severity and cost disparities led to reconfiguring myasthenia gravis codes into two payment HCCs.
Diabetes
- In the CMS-HCC model for 2025 , there are four payment HCCs for the Diabetes illness group. At the top of the hierarchy is HCC 35.
- The lowest payment HCC (HCC 38) now houses diagnosis codes for diabetes with undefined complications and issues with glycemic management.
- Glycemic control-related severe acute consequences remain in the highest payment HCC (HCC 36). Specific drug-induced diabetes codes linked to HCCs did not need payment.
Kidney Disease
- In the CMS-HCC model for 2025 , there are four payment HCCs for kidney illness. More detailed HCCs (328 and 329) based on updated ICD-10 codes have replaced HCC 138.
- The payment approach excluded HCCs associated with acute renal failure and dialysis status. Two more HCCs (325 and 324) were added based on the phases of chronic kidney disease (CKD).
Key Changes in the 2025 Model
Comparing the 2025 model to earlier personifications, there are several important modifications. The most important updates are broken down as follows:
- HCC Restructuring: Almost all HCC categories now have new names and numbers. This indicates a move toward an ICD-10-CM-based classification scheme with greater granularity.
- Including New Codes: 268 new ICD-10-CM codes that had not yet been assigned to an HCC are included in the model. For beneficiaries with these recently identified conditions, this may result in higher medicare risk adjustment scores.
- Removal of Codes: In contrast, 2,027 diagnoses have been eliminated from the model, meaning their risk score for a beneficiary has been affected.
- Technological Updates: Technological adjustments have been made to improve the model’s precision and efficacy in representing healthcare expenditures.
Let’s Wrap Up
Healthcare workers’ approaches to medicare risk adjustment and coding are changed by the 2025 CMS-HCC Risk Adjustment Model. Now that 266 CMS-HCCs have been created from over 74,000 ICD-10-CM diagnostic codes, the model represents a more thorough knowledge of a broader range of medical disorders.
Therefore, Medical organizations can maximize their reimbursement rates by comprehending the CMS-HCC risk adjustment model for 2025 . Additionally, putting into practice a planned approach to coding and documentation. Recall that thorough and correct coding is essential for calculating appropriate risk adjustment.