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Question 1Risk adjustment fundamentals and payment methodology

In the CMS-HCC risk adjustment model, what does a risk adjustment factor (RAF) score of 1.00 represent?

  1. A member who had no diagnoses recorded at all during the data year
  2. The maximum risk score permitted for a community member
  3. The fixed monthly capitation amount paid to the plan
  4. Expected cost equal to the average for the model population Correct answer.

Explanation

Risk scores are relative measures: 1.00 means the member's expected cost equals the average for the model population. Scores above 1.00 indicate expected cost above average and scores below 1.00 indicate expected cost below average. The score itself is a relative index, not a dollar amount.

Question 2Risk adjustment fundamentals and payment methodology

Which risk adjustment model is used to calculate Medicare Advantage Part C payments?

  1. CMS-HCC Correct answer.
  2. CDPS
  3. HHS-HCC
  4. RxHCC

Explanation

The CMS-HCC model was built for the Medicare Advantage program and is used to adjust Part C capitation payments for the expected cost of each enrollee. RxHCC applies to Part D, HHS-HCC to the commercial markets, and CDPS to Medicaid.

Question 3Risk adjustment fundamentals and payment methodology

Which risk adjustment model is applied to the Medicare Part D prescription drug benefit?

  1. HHS-HCC
  2. CDPS
  3. RxHCC Correct answer.
  4. CMS-HCC

Explanation

The RxHCC model is specific to Part D and reflects the expected drug costs of different clinical categories. A beneficiary may therefore have a separate Part C score and Part D score calculated from different models.

Question 4Risk adjustment fundamentals and payment methodology

How long does a documented HCC diagnosis remain eligible to affect risk adjustment payment if it is not documented again in later years?

  1. Only for the payment year that follows the data year Correct answer.
  2. For the next five consecutive payment years after acceptance
  3. For the next three consecutive payment years after acceptance
  4. Permanently, once the diagnosis has been accepted in any payment year

Explanation

Risk adjustment is prospective and recalculated annually, so a condition affects the payment year that follows the year in which it was documented. To keep influencing payment, the condition must be documented and reported again each data year.

Question 5Risk adjustment fundamentals and payment methodology

In risk adjustment documentation, what does the acronym MEAT stand for?

  1. Manage, Examine, Assess, or Test
  2. Monitor, Evaluate, Assess, or Treat Correct answer.
  3. Measure, Evaluate, Audit, or Track
  4. Monitor, Establish, Approve, or Treat

Explanation

MEAT describes the evidence a provider must document for each condition in a face-to-face encounter. The record must show that the provider monitored, evaluated, assessed, or treated the condition during the data year.

Question 6Risk adjustment fundamentals and payment methodology

A beneficiary has diagnoses that fall into both a lower-ranked and a higher-ranked HCC within the same disease hierarchy. How is the score affected?

  1. The lower-ranked HCC is counted and the higher one is ignored
  2. Both HCCs are added together, increasing the risk score
  3. Neither HCC is counted until CMS manually resolves the hierarchy
  4. Only the highest-ranked HCC in that hierarchy is counted Correct answer.

Explanation

CMS-HCC hierarchies group clinically related conditions so that members with the same broad disease process receive similar weight. Only the most severe manifestation within a hierarchy counts toward the risk score.

Question 7Risk adjustment fundamentals and payment methodology

In addition to diagnosis-based HCCs, which factor is a component of every CMS-HCC risk score?

  1. Only the number of face-to-face office visits during the data year
  2. Age, sex, and in some segments Medicaid or disability status Correct answer.
  3. Only the plan's average bid amount for the payment year
  4. The member's ZIP code and household income

Explanation

The model combines demographic factors with diagnosis-based HCC weights and, where applicable, disease interaction factors. Age and sex are always included, and certain segments add indicators such as full-benefit dual eligibility or original disability status.

Question 8Risk adjustment fundamentals and payment methodology

A beneficiary has both diabetes with chronic complications and congestive heart failure documented for the data year in separate hierarchies. How does the CMS-HCC model handle this?

  1. Only the CHF HCC is retained because cardiac conditions take precedence
  2. The two conditions are collapsed into a single, combined HCC
  3. Both HCCs are counted separately and an interaction factor may add weight Correct answer.
  4. Only the diabetes HCC is retained because it ranks higher in the hierarchy

Explanation

Conditions that sit in different hierarchies each contribute their own weight to the score. When a specific costly pairing such as diabetes with CHF is present, an interaction factor can add further weight on top of the individual HCCs.

Question 9Risk adjustment fundamentals and payment methodology

A plan's risk-adjusted bid is $800 per member per month and a member's risk score is 1.25. What is the risk-adjusted monthly payment for that member?

  1. $1,000 Correct answer.
  2. $640
  3. $800
  4. $925

Explanation

The risk-adjusted payment is the bid multiplied by the member's risk score, so $800 × 1.25 = $1,000.

Question 10Risk adjustment fundamentals and payment methodology

What is the primary purpose of a risk adjustment data validation (RADV) audit?

  1. To recalculate each member's Part D premium and cost-sharing
  2. To confirm submitted diagnoses are supported by the medical record Correct answer.
  3. To measure member satisfaction with the plan
  4. To determine the plan's bid and benchmark for the next payment year

Explanation

RADV audits compare diagnoses submitted for payment with the documentation in the medical record. Unsupportable diagnoses are removed and the resulting payment error is calculated, which can lead to recovery of funds.

Question 11Risk adjustment fundamentals and payment methodology

Which of the following is an acceptable basis for submitting a risk-adjustable diagnosis?

  1. A diagnosis inferred by a chart-review nurse but not documented by a provider
  2. An abnormal lab value without any provider interpretation
  3. A condition documented and assessed by the provider at a face-to-face visit Correct answer.
  4. A prescription refill history that suggests a chronic condition

Explanation

A diagnosis must be documented by an acceptable provider during a face-to-face encounter and supported by assessment or treatment in the record. Inference from medications, labs, or staff review alone does not meet that standard.

Question 12Risk adjustment fundamentals and payment methodology

Which risk adjustment model is used for individual and small-group markets under the Affordable Care Act?

  1. CDPS
  2. HHS-HCC Correct answer.
  3. RxHCC
  4. CMS-HCC

Explanation

HHS-HCC is the Department of Health and Human Services model that applies to the individual and small-group markets. It uses age, sex, and diagnosis categories organized into its own condition hierarchy.

Question 13Risk adjustment fundamentals and payment methodology

What is the purpose of the coding intensity adjustment applied to Medicare Advantage risk scores?

  1. To remove members who disenroll mid-year from the risk score calculation
  2. To convert Part D risk scores into Part C risk scores
  3. To increase payment for plans whose members have higher chronic condition counts
  4. To offset differences in diagnosis coding between MA plans and fee-for-service Medicare Correct answer.

Explanation

CMS applies the coding intensity adjustment because MA plans have a financial incentive to document diagnoses more completely than fee-for-service settings. The adjustment reduces MA risk scores by a set percentage to neutralize that difference.

Question 14Risk adjustment fundamentals and payment methodology

A 72-year-old member lives in the community and receives full Medicaid benefits. Which CMS-HCC model segment applies?

  1. Institutional, aged, full-benefit dual
  2. Community, aged, full-benefit dual Correct answer.
  3. New enrollee, aged
  4. Community, aged, non-dual

Explanation

Segment assignment combines residential setting, age bracket, and Medicaid or disability status. A community-dwelling member aged 65 or older with full Medicaid benefits falls into the community, aged, full-benefit dual segment.

Question 15Risk adjustment fundamentals and payment methodology

When does CMS use the new enrollee model to calculate a risk score?

  1. Whenever a member switches from one MA plan to another mid-year
  2. Whenever a member has more than ten HCCs recorded in a single year
  3. When no diagnosis history is available for the member's data year Correct answer.
  4. Only for members who are younger than 65 years of age at enrollment

Explanation

New Medicare enrollees have no prior diagnosis data, so CMS applies a demographic-only new enrollee model. Once diagnosis data accumulate, the member is scored under the standard CMS-HCC model.

Question 16Risk adjustment fundamentals and payment methodology

A member's record contains two different ICD-10-CM codes that both map to the same HCC. How is the risk score affected?

  1. The second code is counted at half of the HCC weight
  2. The HCC is counted twice, once for each diagnosis code submitted
  3. The HCC is counted once, no matter how many codes map to it Correct answer.
  4. Neither code is counted because the mapping is ambiguous

Explanation

Payment is driven by HCCs, not by the number of codes. Multiple codes that fall into the same HCC produce a single HCC weight for that member.

Question 17Risk adjustment fundamentals and payment methodology

For a Medicare Advantage payment year of 2025, diagnoses from which period are used in the base risk score calculation?

  1. The first six months of 2025
  2. Calendar year 2024 Correct answer.
  3. Calendar years 2020 through 2024 combined
  4. Calendar year 2025

Explanation

The model is prospective: the payment year risk score is built from diagnoses documented in the preceding data year. Payment year 2025 therefore relies primarily on calendar year 2024 data.

Question 18Risk adjustment fundamentals and payment methodology

A previously reported cancer is now documented as in complete remission with no active treatment, monitoring, or evaluation during the data year. What is the appropriate action?

  1. Report the diagnosis only in alternating years to avoid duplicate submissions
  2. Continue reporting the cancer diagnosis because it was once confirmed
  3. Substitute a remission code so that the existing HCC weight is preserved
  4. Stop reporting the cancer diagnosis because it no longer meets HCC criteria Correct answer.

Explanation

HCCs reflect conditions that were assessed, evaluated, treated, or monitored during the data year. A condition that no longer meets those criteria should not be reported, and the member's score will decrease accordingly.

Question 19Risk adjustment fundamentals and payment methodology

CMS now relies on which system as the sole source of diagnosis data for calculating Medicare Advantage Part C risk scores?

  1. Encounter Data Processing System (EDPS) Correct answer.
  2. Risk Adjustment Processing System (RAPS)
  3. The plan's internal claims adjudication system
  4. The Part D prescription drug event file

Explanation

CMS completed its transition to 100% encounter data, so diagnoses submitted through EDPS are the basis for risk score calculation. RAPS is no longer used as a diagnosis source for Part C risk scores.

Question 20Risk adjustment fundamentals and payment methodology

A chart review confirms an additional diagnosis that maps to an HCC already outranked by a higher-tier HCC in the same hierarchy for that member. What is the effect of adding the new code?

  1. The higher-ranked HCC is removed and replaced by the newly added one
  2. No increase, because only the highest-ranked HCC in a hierarchy counts Correct answer.
  3. The newly added diagnosis is rejected during validation as a duplicate
  4. The risk score increases by the full weight of the newly documented HCC

Explanation

Hierarchy logic means the member already receives the weight of the most severe manifestation in that disease group. Adding a lower-tier code within the same hierarchy does not generate additional payment, although the code should still be documented accurately.

Question 21Risk adjustment fundamentals and payment methodology

Which statement about principal diagnosis selection is accurate in the context of risk adjustment coding?

  1. The principal diagnosis must always be the condition with the highest HCC weight
  2. Principal diagnosis affects payment only for institutional-segment members
  3. Only the principal diagnosis may be submitted for risk adjustment
  4. Any documented condition supported by the record can be captured Correct answer.

Explanation

Risk adjustment is not a claim-paying hierarchy in which only the first-listed diagnosis counts. Every condition that is documented, supported, and maps to an HCC can be captured regardless of sequence.

Question 22Risk adjustment fundamentals and payment methodology

Two members have the same set of HCCs. Which factor best explains why their risk scores still differ?

  1. One of the two members must have an unreported additional diagnosis
  2. Risk scores are adjusted randomly within each HCC to prevent gaming
  3. HCC weights are recalculated individually for every member each year
  4. Demographics, model segment, and interaction factors differ Correct answer.

Explanation

A risk score is built from demographic factors, segment-specific coefficients, HCC weights, and any applicable interaction factors. Two members with identical HCCs can therefore land on different scores.

Question 23Risk adjustment fundamentals and payment methodology

A member resides in a long-term nursing facility for 120 days during the data year. Which CMS-HCC model segment applies?

  1. Community, aged, full-benefit dual
  2. Institutional Correct answer.
  3. New enrollee, aged
  4. Community, aged, non-dual

Explanation

A beneficiary who resides in an institution for the threshold period during the data year is scored under the institutional segment, which carries its own set of coefficients. Community segments apply to members who do not meet that residency threshold.

Question 24Risk adjustment fundamentals and payment methodology

CMS releases a new version of the CMS-HCC model. If a plan's documentation practices do not change, what is the most likely effect on its risk scores?

  1. Only members with end-stage renal disease see any change in their score
  2. Risk scores are frozen at the prior version's values for all members
  3. Risk scores may change because code-to-HCC mappings and weights are updated Correct answer.
  4. Risk scores stay identical because the underlying diagnosis codes do not change

Explanation

Each model version revises which diagnosis codes map to which HCCs and recalibrates the relative weights, and versions are phased in over several years. A plan can therefore see its scores shift even when its coding and documentation remain the same.

Question 25Hierarchical Condition Category (HCC) and risk adjustment models

In the CMS-HCC risk adjustment model, what does a risk score of 1.0 represent?

  1. A beneficiary with no submitted diagnosis codes
  2. The expected cost of an average beneficiary in the model population Correct answer.
  3. The maximum score a beneficiary can receive
  4. The score assigned to every new Medicare enrollee

Explanation

Risk scores are relative measures: a score of 1.0 equals the average expected cost for the population used to calibrate the model. Scores above or below 1.0 reflect expected cost that is higher or lower than that average.

Question 26Hierarchical Condition Category (HCC) and risk adjustment models

The prospective CMS-HCC model uses diagnosis data from which period to set payment for a given payment year?

  1. The beneficiary's first year of Medicare enrollment
  2. The three years before the payment year, averaged together
  3. The calendar year immediately preceding the payment year Correct answer.
  4. The same payment year in which the payment is made

Explanation

Prospective risk adjustment uses diagnoses from a data year to predict costs in the following payment year. This is why conditions must be documented and submitted in the data year to affect the next year's payment.

Question 27Hierarchical Condition Category (HCC) and risk adjustment models

What is a Hierarchical Condition Category (HCC)?

  1. A group of clinically related diagnosis codes used to predict cost Correct answer.
  2. A quality measure category used in star ratings
  3. A single ICD-10-CM code chosen as the primary diagnosis
  4. A payment tier based on the specialty of the treating provider

Explanation

HCCs aggregate clinically similar ICD-10-CM diagnosis codes into categories that carry an expected cost weight. The weights are combined with demographic factors to produce a risk score.

Question 28Hierarchical Condition Category (HCC) and risk adjustment models

A beneficiary has two conditions that both fall within the same HCC hierarchy. How does the payment model treat them?

  1. Neither HCC contributes because the hierarchy cancels them
  2. Both HCCs are counted and their weights are added together
  3. The two HCC weights are averaged into a single value
  4. Only the most severe HCC in the hierarchy contributes to payment Correct answer.

Explanation

A hierarchy exists so that a disease and its more severe manifestations are not paid twice. When multiple HCCs sit in one hierarchy, only the highest-ranked HCC is used in the score.

Question 29Hierarchical Condition Category (HCC) and risk adjustment models

Which model is used to risk adjust prescription drug spending under Medicare Part D?

  1. The RxHCC model Correct answer.
  2. The CMS-HCC community model
  3. The ESRD model
  4. The institutional model

Explanation

Part D uses its own prescription drug hierarchical condition categories, known as RxHCCs, built from drug and diagnosis data. The CMS-HCC model applies to medical benefits under Part C.

Question 30Hierarchical Condition Category (HCC) and risk adjustment models

A chronic condition appears on a beneficiary's electronic problem list but is never mentioned in any encounter note for the year. How should it be handled for risk adjustment?

  1. Do not code it; the condition must be documented for an encounter Correct answer.
  2. Code it if a laboratory result is consistent with the condition
  3. Code it, because the problem list is part of the legal medical record
  4. Code it if the patient confirms the condition at check-in

Explanation

Diagnoses must be supported by provider documentation from a qualifying encounter in the data year. A problem-list entry or test result alone does not establish that the condition was assessed or managed.

Question 31Hierarchical Condition Category (HCC) and risk adjustment models

Why must chronic conditions be documented again in each data year to keep affecting payment?

  1. Because HCCs expire automatically three years after the first submission
  2. Because a diagnosis is clinically valid for only twelve months
  3. Because CMS requires a new beneficiary consent form each year
  4. Because each payment year is scored from the encounters of its own data year Correct answer.

Explanation

Risk scores are recalculated annually from that year's data, so there is no carry-forward of prior-year diagnoses. A condition that is never documented in the current data year will not appear in the next payment year's score.

Question 32Hierarchical Condition Category (HCC) and risk adjustment models

How does the CMS-HCC community model account for a beneficiary who is also eligible for Medicaid?

  1. It removes the beneficiary from risk adjustment
  2. It applies an additional demographic factor reflecting Medicaid eligibility Correct answer.
  3. It doubles the weight of each HCC in the beneficiary's score
  4. It assigns the beneficiary to the institutional segment

Explanation

Community segments include demographic factors such as age, sex, disability status, and Medicaid eligibility because dual-eligible beneficiaries have different expected costs. These factors adjust the score independently of the HCCs.

Question 33Hierarchical Condition Category (HCC) and risk adjustment models

Which beneficiary would be assigned to the institutional segment of the CMS-HCC model?

  1. A beneficiary who has just enrolled in Medicare for the first time
  2. A beneficiary receiving dialysis for end-stage renal disease
  3. A beneficiary who has resided in a long-term nursing facility Correct answer.
  4. A beneficiary who had one inpatient stay last year and now lives at home

Explanation

The institutional segment applies to beneficiaries who are long-term residents of nursing facilities or certain other institutions. Costs for this group are modeled separately from community-dwelling beneficiaries.

Question 34Hierarchical Condition Category (HCC) and risk adjustment models

What do interaction factors in the CMS-HCC model represent?

  1. Extra predicted cost when specific condition combinations occur together Correct answer.
  2. Adjustments that suspend hierarchies for complex patients
  3. Penalties applied when a diagnosis lacks supporting documentation
  4. Rewards for plans that submit complete encounter data

Explanation

Interaction terms capture costs that exceed the sum of the individual HCCs when particular combinations occur, such as diabetes together with congestive heart failure, or certain conditions combined with frailty or disability. They are added on top of the main HCC weights.

Question 35Hierarchical Condition Category (HCC) and risk adjustment models

What is the primary purpose of CMS Risk Adjustment Data Validation (RADV) audits?

  1. To verify that submitted diagnoses are supported by the medical record Correct answer.
  2. To measure beneficiary satisfaction with Medicare Advantage plans
  3. To review the adequacy of plan pharmacy formularies
  4. To set the following year's county benchmark rates

Explanation

RADV audits sample enrolled beneficiaries and compare submitted diagnosis data against the medical record. Unsupported diagnoses can be removed and payment recovered, which is why documentation quality is central to risk adjustment compliance.

Question 36Hierarchical Condition Category (HCC) and risk adjustment models

A provider documents 'suspected congestive heart failure, workup pending' and orders an echocardiogram. How should this be coded for risk adjustment?

  1. Code it as heart failure and add a 'rule out' note to the claim
  2. Code both the symptom and the suspected heart failure
  3. Code it as confirmed heart failure because the provider suspects it
  4. Do not code it as heart failure; suspected conditions are not confirmed diagnoses Correct answer.

Explanation

Only conditions documented as existing are coded; uncertain diagnoses such as 'suspected' or 'rule out' are not reported in this setting. The sign or symptom that prompted the workup may be coded instead if it is documented.

Question 37Hierarchical Condition Category (HCC) and risk adjustment models

Why does assigning a diagnosis at the highest level of specificity matter in risk adjustment?

  1. Unspecified codes are automatically rejected by clearinghouses
  2. An unspecified code may not map to an HCC Correct answer.
  3. Specificity affects quality reporting only, not risk adjustment
  4. Each added character raises the payment weight of the code

Explanation

HCC mapping is code-specific: a less specific code may fall outside the code set recognized for the HCC. When the documented detail is available, coding to the most specific level helps ensure the condition reaches the correct category.

Question 38Hierarchical Condition Category (HCC) and risk adjustment models

How did CMS implement Version 28 of the CMS-HCC model for Medicare Advantage?

  1. It was implemented only after a pilot in three states
  2. It replaced all prior models in a single payment year
  3. It blended V24 and V28 weights, raising the V28 share over three payment years Correct answer.
  4. It applied only to beneficiaries with end-stage renal disease

Explanation

V28 was phased in over three payment years beginning in 2024, using a blend with the prior version that shifted progressively toward full V28 weights. The new version also removed a large number of diagnosis codes and revised several hierarchies.

Question 39Hierarchical Condition Category (HCC) and risk adjustment models

What is the effect of normalization on CMS-HCC risk scores?

  1. Scores are scaled so the population average equals 1.0 Correct answer.
  2. Scores are converted into a percentile rank
  3. Scores are rounded to the nearest whole number
  4. Scores are capped at a maximum of 1.0

Explanation

Normalization adjusts the raw model output so the average score in the calibration population is 1.00. This keeps the score relative to a stable average even when the model or the underlying coding changes.

Question 40Hierarchical Condition Category (HCC) and risk adjustment models

How does concurrent risk adjustment differ from prospective risk adjustment?

  1. Concurrent models use diagnoses from three years before the payment period
  2. Concurrent models apply only to pharmacy spending
  3. Concurrent models do not use diagnosis data at all
  4. Concurrent models use diagnoses from the same period as the costs being predicted Correct answer.

Explanation

A concurrent model explains costs incurred in the same period the diagnoses are recorded, which is common in Medicaid. Medicare Advantage uses a prospective model that predicts a future year from a prior data year.

Question 41Hierarchical Condition Category (HCC) and risk adjustment models

A diagnosis is documented in a single office visit note dated December 5 of the data year. How is it treated?

  1. It is assigned to the following data year regardless of date
  2. It can be used, because the encounter falls within the data year Correct answer.
  3. It cannot be used because outpatient notes are excluded from the model
  4. It can be used only if it is repeated in the next year

Explanation

The determining factor is the date of the qualifying encounter, not the date the claim is processed. An encounter within the data year supports capture of the condition for the following payment year.

Question 42Hierarchical Condition Category (HCC) and risk adjustment models

A beneficiary's risk score is 1.35. How should this be interpreted?

  1. The beneficiary has 35 documented HCCs
  2. Expected cost is about 35 percent above the model average Correct answer.
  3. The beneficiary has a 35 percent chance of hospitalization
  4. The beneficiary pays 135 percent of the plan premium

Explanation

Because 1.0 represents average expected cost, a score of 1.35 indicates expected cost about one-third higher than that average. The score is a cost ratio, not a probability or a count of conditions.

Question 43Hierarchical Condition Category (HCC) and risk adjustment models

A chart lists 'personal history of breast cancer' with no evidence of recurrence. How does this affect the risk score?

  1. It raises the score only when it is documented in two encounters
  2. It generally does not change the score; history codes are not payment HCCs Correct answer.
  3. It maps to the breast cancer HCC and raises the score
  4. It maps to a hierarchy that replaces all other cancer HCCs

Explanation

History codes describe a resolved condition rather than active disease, so they generally fall outside the code set that maps to payment HCCs. Only active, documented conditions contribute to the score.

Question 44Hierarchical Condition Category (HCC) and risk adjustment models

Which documentation best supports capturing a diagnosis in the risk adjustment model?

  1. Documented at a face-to-face visit in the data year Correct answer.
  2. Carried forward from any prior year's documentation
  3. Reported by the patient on a health risk assessment
  4. Listed only on a billing encounter form

Explanation

A diagnosis must be documented by an eligible provider during a qualifying face-to-face encounter in the data year, along with evidence that it was assessed or managed. Prior-year notes, self-report, and billing forms do not meet this standard.

Question 45Hierarchical Condition Category (HCC) and risk adjustment models

Through what primary mechanism do Medicare Advantage organizations now submit diagnosis data to CMS for risk adjustment?

  1. Pharmacy claims
  2. Paper chart summaries mailed at year end
  3. Encounter data records Correct answer.
  4. Quality reporting submissions

Explanation

Encounter data submitted through the CMS encounter data system is the primary source of diagnoses for risk adjustment, having replaced the legacy reporting system. Accurate, complete encounter submissions are therefore central to payment accuracy.

Question 46Hierarchical Condition Category (HCC) and risk adjustment models

Which statement about the relationship between ICD-10-CM codes and HCCs is accurate?

  1. Every valid diagnosis code maps to some HCC
  2. Each HCC contains exactly one diagnosis code
  3. Each diagnosis code maps to exactly one unique HCC
  4. Many codes can map to a single HCC, and some codes map to none Correct answer.

Explanation

HCCs are broad categories, so numerous diagnosis codes may funnel into one HCC. Many other codes, such as symptom codes and history codes, do not map to any payment category.

Question 47Hierarchical Condition Category (HCC) and risk adjustment models

In Medicare Advantage, a member's risk score directly affects which of the following?

  1. The risk-adjusted payment the plan receives for that member Correct answer.
  2. The member's cost-sharing amounts
  3. The plan's star rating
  4. The member's monthly premium

Explanation

Risk scores feed the payment model that adjusts the capitation CMS pays a plan for each member. Plans with members whose documented burden of illness is higher receive correspondingly higher payments.

Question 48Hierarchical Condition Category (HCC) and risk adjustment models

How are Medicare beneficiaries with end-stage renal disease risk adjusted?

  1. They are excluded from risk adjustment entirely
  2. Under the RxHCC model
  3. They are assigned to the institutional segment
  4. Under a separate ESRD model rather than the standard community model Correct answer.

Explanation

CMS maintains a distinct model for beneficiaries with end-stage renal disease because their cost patterns differ markedly from the general population. Those beneficiaries are therefore not scored with the standard community model.

Question 49Hierarchical Condition Category (HCC) and risk adjustment models

A Medicare Advantage beneficiary has documented diagnoses of type 2 diabetes with ketoacidosis and, separately, uncomplicated type 2 diabetes. How does the CMS-HCC model treat these diagnoses when calculating the risk score?

  1. Neither condition category is counted because the record contains conflicting diabetes codes.
  2. Only the condition category for the more severe diabetes manifestation is counted. Correct answer.
  3. The two condition categories are blended into a single averaged weight.
  4. Both condition categories are counted and their weights are added together.

Explanation

Condition categories are organized into hierarchies so that related diagnoses of differing severity collapse to the most severe category. When a beneficiary has both a severe and a mild manifestation of the same disease group, only the highest-severity category contributes to the score, which prevents duplicate counting of the same underlying condition.

Question 50Hierarchical Condition Category (HCC) and risk adjustment models

What is the purpose of the coding intensity adjustment that CMS applies to Medicare Advantage risk scores?

  1. It adjusts scores for geographic differences in the cost of delivering care across counties.
  2. It removes diagnoses that were submitted by specialists rather than primary care clinicians.
  3. It raises scores for plans that submit diagnoses electronically rather than on paper claims.
  4. It reduces scores to account for differences in diagnostic coding patterns between Medicare Advantage organizations and fee-for-service Medicare. Correct answer.

Explanation

CMS applies a coding intensity adjustment because diagnostic coding in Medicare Advantage has been observed to be more complete than in fee-for-service Medicare. The adjustment is a percentage reduction applied to plan risk scores so that payment differences driven by coding patterns rather than by actual illness burden are minimized.