Risk adjustment of Medicare capitation payments using the CMS-HCC model

Health Care Financ Rev. 2004 Summer;25(4):119-41.


This article describes the CMS hierarchical condition categories (HCC) model implemented in 2004 to adjust Medicare capitation payments to private health care plans for the health expenditure risk of their enrollees. We explain the model's principles, elements, organization, calibration, and performance. Modifications to reduce plan data reporting burden and adaptations for disabled, institutionalized, newly enrolled, and secondary payer subpopulations are discussed.

Publication types

  • Research Support, U.S. Gov't, Non-P.H.S.

MeSH terms

  • Adolescent
  • Adult
  • Aged
  • Aged, 80 and over
  • Capitation Fee*
  • Centers for Medicare and Medicaid Services, U.S.
  • Child
  • Child, Preschool
  • Female
  • Humans
  • Infant
  • Infant, Newborn
  • International Classification of Diseases
  • Male
  • Medicare Part C / organization & administration*
  • Middle Aged
  • Models, Organizational
  • Risk Adjustment*
  • United States