Forty terms that come up over and over again in risk-bearing operations. Acronym, plain-English definition, and links to the posts that go deeper.
A per-member numerical score CMS uses to predict the expected cost of caring for a Medicare Advantage enrollee. The RAF is derived from demographic factors (age, sex, Medicaid status, disability status) and clinical conditions captured as HCCs. A higher RAF means CMS pays the plan more per month to manage that member. Plans rely on accurate, complete, documented clinical capture during the calendar year to keep RAF aligned with the member's true acuity.
A category in the CMS risk-adjustment model that groups related ICD-10 diagnoses for the purpose of computing a member's RAF. Each HCC has a coefficient; only the most severe HCC in a given hierarchy counts toward the score (for example, diabetes with complications trumps diabetes without complications). Chronic conditions must be documented in a face-to-face encounter during each calendar year to count toward that year's payment.
The CMS-HCC risk adjustment model used through payment year 2023, with 86 HCC categories and roughly 9,700 ICD-10 codes mapped to those categories. Being phased out in favor of V28, with a three-year blended transition through payment years 2024 and 2025.
The 2024 CMS-HCC risk adjustment model, fully effective for payment year 2026. V28 expands the HCC category set to 115 and reduces the ICD-10-to-HCC crosswalk to about 7,770 codes. CMS's Office of the Actuary projected an aggregate average MA risk score reduction of about 3.12% under V28, with plan-level impact between 2% and 6% depending on member mix and prior coding intensity. Introduces or tightens constrained groups for related conditions.
A monthly response file CMS sends to Medicare Advantage plans showing which encounter-data diagnoses were accepted or rejected for risk adjustment, with rejection reason codes. The file is the closest plans get to a real-time signal that their documentation is, or is not, holding up. Reading and acting on MAO-004 reject codes is one of the highest-leverage and most overlooked tasks for a risk adjustment team.
The CMS monthly report listing each MA enrollee with their final calculated RAF score for the current payment year, used by plans to reconcile per-member-per-month payment. The MMR is plans' authoritative record of who CMS thinks is enrolled and at what risk score.
The CMS report showing which HCCs and demographic factors contributed to each enrollee's risk score in a given payment year. The MOR is how plans confirm that a captured diagnosis actually translated into a higher RAF, after CMS applied trumping and constrained-group logic.
The X12 277CA transaction CMS sends back to confirm that a submitted encounter data record was syntactically accepted or rejected at the front door, before the diagnosis-level MAO-004 processing. A clean 277CA is necessary but not sufficient: a record can pass 277CA and still be rejected for risk adjustment in MAO-004.
CMS's audit program for Medicare Advantage plans' risk adjustment data, sampling member-year combinations and demanding source documentation for each captured HCC. The 2023 RADV final rule made findings extrapolated to the contract level and eliminated the fee-for-service adjuster, raising the financial exposure for unsupported HCCs by orders of magnitude.
A V28 mechanism that places related HCC categories into a single group that shares one coefficient. Only the highest-weighted condition in the group counts toward payment; documenting more conditions inside the same constrained group does not raise RAF. Constrained groups are the reason why capture effort under V28 has to target conditions that add a distinct payable HCC, not redundant codes inside one group.
NCQA's set of standardized performance measures used to compare health plans, covering effectiveness of care, access, experience, utilization, and risk-adjusted outcomes. HEDIS includes more than 90 measures across domains and is the primary source of clinical quality measures used in the CMS Star Ratings program.
NCQA's reporting standard for HEDIS measures using continuous electronic data from claims, EHRs, health information exchanges, and case management systems, rather than chart-abstraction sampling. NCQA is retiring the hybrid (sampled chart abstraction) method by reporting year 2029. ECDS reporting increases supplemental data volumes by 35x to 75x per measure compared to hybrid.
A federally-funded survey program measuring patient experience with health plans and providers. CAHPS measures are weighted at 2 in the 2027 CMS Star Ratings and meaningfully influence quality bonus payments. Because CAHPS measures are member-reported, they are slower-moving and harder to influence in-cycle than process or outcome measures.
CMS's 1-to-5 star rating program for Medicare Advantage and Part D plans, used by members to compare plans during open enrollment and tied to a quality bonus payment that flows into plan revenue and rebate dollars. Reaching 4 stars triggers the quality bonus; the difference between 3.5 and 4 stars at the contract level is measured in many millions of dollars per year.
A statistical method CMS applies to remove outlier scores before setting cut points for non-CAHPS Star Ratings measures. Finalized in 2020 rulemaking and in effect since the 2024 Star Ratings, Tukey removes a small number of very low performers from the distribution before cut points are computed. The effect is mechanical: cut points rise, and the score needed to clear 4 stars on a given measure goes up.
The threshold score required on a Star Ratings measure to receive a given star level (1 through 5). Cut points are recomputed each year from the distribution of plan performance. Since CMS removed the guardrails that capped year-over-year cut-point movement, cut points have become more volatile, which means past-year performance is no longer a reliable forecast of current-year stars.
A Star Ratings improvement measure that rewards year-over-year improvement on existing measures across a plan's portfolio. Weighted at 5 in the 2027 Star Ratings, the single highest weight in the program. The Part D equivalent, Drug Plan Quality Improvement, is also weighted at 5.
The Medicare prescription drug benefit. Part D plans receive their own Star Rating in addition to the overall Medicare Advantage-Part D rating, and three triple-weighted medication adherence measures dominate the Part D summary score (diabetes, hypertension/RAS antagonists, and cholesterol/statins).
The fraction of days in a measurement period that a member had a medication available, based on fill and supply data. A PDC of 80% or higher counts a member as adherent for the three Part D adherence Star Ratings measures. The 80% threshold creates a cliff effect: members who fall to 79% count as non-adherent at the same rate as a member who never filled at all.
A required Part D program providing comprehensive medication review (CMR) and targeted medication review (TMR) to eligible enrollees with multiple chronic conditions and high medication costs. The MTM Program Completion Rate for CMR has been a Star Ratings measure with changing weight rules between 2025 and 2029.
The CMS-submitted record of a Part D prescription fill, used for payment reconciliation and as the source data for medication adherence and other Part D measures. PDE files are how plans see fills happening at network pharmacies in near real time.
A Part D Star Ratings process measure tracking the percentage of members 40 to 75 with diabetes who received a statin medication during the measurement year. Weight 1 in the 2027 Star Ratings.
A Part D Star Ratings safety measure tracking concurrent opioid and benzodiazepine prescribing, a combination associated with elevated risk of adverse events. Added to the Star Ratings program beginning with 2027.
Real-time HL7 event messages sent by hospitals when a patient is admitted, discharged, or transferred between care settings. ADT feeds are the basis for transitions-of-care workflows, post-discharge follow-up, and inpatient utilization tracking. Whether a risk-bearing organization has live ADT access is one of the largest determinants of how prospective its operations can be.
A Medicare-paid service for the 30 days following discharge from inpatient care. Requires interactive contact within 2 business days of discharge and a face-to-face visit within 7 calendar days (high medical decision making, CPT 99496) or 14 days (moderate complexity, CPT 99495). Strong TCM execution is one of the most reliable levers for reducing 30-day readmissions.
Emergency department visits for conditions that could have been managed in primary care or with timely follow-up. A focus area for risk-bearing organizations because each visit represents both a clinical signal (the patient could not access care elsewhere) and a recoverable cost (the visit is expensive and often partly attributable to gaps in proactive outreach).
The recurring meeting between a health plan or IPA and a contracted practice or medical group, used to review value-based care performance and align on workflow changes. Typically held quarterly. Historically retrospective, looking at performance that closed three months ago; effective JOCs are prospective, surfacing the next 90 days of work that can still be acted on.
An open standard from HL7 for embedding third-party applications inside EHRs (Epic, Athena, Cerner, eClinicalWorks, others) using OAuth 2 authentication and the FHIR data model. The basis of most EHR overlays for value-based care workflows, because it allows an outside app to surface in the EHR at the point of care without requiring custom integration per vendor.
A third-party application surfaced inside the provider's electronic medical record at the point of care, typically via SMART-on-FHIR. Used to deliver suspected diagnoses, open gaps, and documentation prompts in the workflow where the provider already works. Without an EMR overlay, every "real-time" gap surface ends up living in a separate portal that the provider does not open during the visit.
A set of payment and care delivery models that tie provider or plan revenue to quality outcomes and total cost of care, rather than to the volume of services delivered. Includes risk-bearing contracts, ACO models, Medicare Advantage capitation arrangements, bundled payments, and the various Innovation Center models. The common feature is that the contracted entity carries financial accountability for outcomes.
A legal entity formed by physicians in independent practice to contract collectively with health plans, often taking on delegated risk for a population. A common structure for risk-bearing primary care groups, particularly in California, New York, Texas, and Florida. IPAs can range from a few practices to thousands of members.
A group of providers and suppliers that jointly takes responsibility for the cost and quality of care for an attributed Medicare population. Includes the permanent MSSP program and Innovation Center models such as ACO REACH. Membership is typically attributed based on the primary care provider a beneficiary visits most often.
A non-clinical entity that provides administrative, contracting, technology, and operational services to provider groups, IPAs, and ACOs, often enabling them to take on risk-bearing contracts they could not run alone. MSOs typically share in upside under those contracts in exchange for the infrastructure they provide.
A network of otherwise independent providers organized to coordinate care and jointly negotiate value-based contracts, meeting federal antitrust standards for clinical integration. CINs typically include shared performance measures, shared technology infrastructure, and active care coordination across participating providers.
A contract under which a provider organization is responsible for the financial outcomes of caring for an attributed population, sharing in savings if total cost falls below benchmark and absorbing losses if it does not. The defining feature of operating in value-based care, and the source of the operational pressure on RAF, HEDIS, and utilization performance.
A payment arrangement in which a provider receives a fixed per-member, per-month amount in exchange for delivering all defined services for that member, regardless of utilization. Full capitation transfers nearly all financial risk to the provider; partial or professional capitation transfers risk for a defined subset of services.
The permanent Medicare ACO program. ACOs are eligible to share savings (and in many tracks, share losses) against a benchmark of historical fee-for-service spending for their attributed beneficiaries. The largest single ACO program by participation in the United States.
A CMS Innovation Center ACO model focused on advancing health equity in underserved communities, with both Standard and High Needs tracks. ACO REACH is the successor to the Global and Professional Direct Contracting model and uses prospective payment with higher levels of risk-bearing than typical MSSP tracks.
A Medicare Advantage Special Needs Plan that serves members eligible for both Medicare and Medicaid. Operates under additional integration and care coordination requirements because of the population's complexity, and typically requires close coordination with state Medicaid programs.
A CMS adjustment to certain Star Ratings measures that accounts for the impact of low-income subsidy, dual-eligible, and disability status on measure performance. Being phased in during measurement year 2026 for the three Part D adherence measures, which is why those measures are temporarily single-weighted for the 2028 Star Ratings before returning to triple weight.
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