The Health and Human Services (HHS) Hierarchical Condition Category (HCC) model operates on a concurrent basis. This means it uses demographic data and diagnoses captured during the current benefit year to calculate a risk score that predicts healthcare spending for that same year. This differs significantly from the Centers for Medicare & Medicaid Services (CMS) HCC model for Medicare Advantage, which is prospective. The CMS model uses data from a prior year (the base year) to predict spending for the following year (the payment year).

B: This describes the prospective CMS-HCC model used for Medicare Advantage, not the concurrent HHS-HCC model.

C: This is less precise; the model is based on demographics and diagnoses, not CPT codes, which represent services rendered.

D: This incorrectly describes a prospective model and inaccurately includes CPT codes as a basis for calculation.

1. Centers for Medicare & Medicaid Services (CMS). (March 31, 2023). HHS-Operated Risk Adjustment Methodology for the 2023 Benefit Year. Section 2: "Overview of the HHS-Operated Risk Adjustment Methodology," page 4.

2. Kautter, J., Pope, G. C., & Ingber, M. (2014). The HHS-HCC risk adjustment model for individual and small group markets. Medicare & Medicaid Research Review, 4(3), E1-E19. https://doi.org/10.5600/mmrr.004.03.a01