In CMS-HCC risk adjustment, which is true about how risk scores are determined?

• A. It uses diagnoses to assign risk scores, incorporating demographic and clinical conditions to adjust capitation payments; sicker patients yield higher payments.
• B. It uses only demographic data for risk scores.
• C. It is used only for Medicaid waivers.
• D. It assigns risk scores based on provider performance.

Answer: (A)

The main idea is that CMS-HCC risk scores come from diagnoses documented in claims, grouped into Hierarchical Condition Categories, and used to estimate expected health care costs. Demographic factors like age and sex are included as modifiers, but the scores are driven by the patient’s health status as captured by diagnoses. Higher disease burden or more severe conditions raise the risk score, which in turn increases the per-member-per-month payments to reflect the higher expected costs of caring for sicker enrollees.

This isn’t based only on demographics, isn’t limited to Medicaid waivers, and isn’t determined by provider performance.