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TEAM - Preparing for Risk Capture HCC Crosswalk

Understanding the Proposed HCC Changes in TEAM’s Risk Adjustment Methodology for FY 2026

In the FY 2025 IPPS/LTCH PPS final rule, CMS finalized to use episode category-specific risk adjusters linked to Hierarchical Condition Categories (HCCs). This method aimed to more accurately account for beneficiary-level variation in episode spending. As CMS moves toward implementation of HCC Version 28 (v28), they are proposing to update TEAM’s risk adjustment methodology to v28 HCCs.


The updated version introduces more granular categorization of conditions, offering increased specificity in identifying clinical complexity. As a result, CMS conducted a fresh Lasso regression analysis, supplemented with clinical input, to determine which v28 HCCs should be included in the risk adjustment process.


What’s Changing in the TEAM Risk Adjustment Approach?

Under the proposed changes:

  • HCC v28 would replace v22 for identifying episode category-specific risk adjusters.

  • The current finalized model includes approximately 25 risk adjusters per episode category (including both HCC and non-HCC factors).

  • The proposed model would expand that to about 30 risk adjusters per episode category by incorporating v28 HCCs.

  • This increase is considered proportional to the overall increase in HCC categories from v22 to v28.


CMS emphasizes that the updated list maintains the overall goal: a simplified, streamlined model that accurately reflects spending risk while aligning with the most recent coding standards.


Key Points to Know

  • Non-HCC risk adjusters remain: Risk adjusters unrelated to HCCs — such as age brackets, HCC counts, hospital size, or safety net status — were part of the original Lasso and clinical review and are still deemed valid.

  • HCC Variation Across Bundles: The impact of coding can vary significantly depending on the clinical characteristics of the episode category.


Breaking Down the HCCs Across Bundles

There are 47 different HCCs across the 5 bundles.

Variation of HCCs exists across the bundles.

11 HCCs are contained in all 5 bundles.

Check out the cross walk to review HCCs per bundle.



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