What HHS-HCC is
HHS-HCC stands for HHS Hierarchical Condition Categories. It is the risk-adjustment model the Department of Health and Human Services (HHS) administers for the commercial Affordable Care Act (ACA) markets, the individual and small-group health plans sold on and off the exchanges. Like every HCC model, it translates ICD-10-CM diagnoses into condition categories, gives each category a risk weight, and sums those weights into a score that reflects how expensive a member is expected to be.
The purpose is to keep plans from being penalized for enrolling sicker members. A plan with a high-risk population would lose money under flat premiums, so risk adjustment moves funds toward the plans carrying that risk. HHS-HCC is the model that measures it for the commercial ACA market, the same role CMS-HCC plays in Medicare Advantage.
CMS-HCC vs HHS-HCC at a glance
Both models run the same diagnosis-to-category machinery. They split on who gets scored, when the diagnoses count, and where the money comes from. CMS-HCC governs Medicare Advantage; HHS-HCC governs the commercial ACA individual and small-group markets.
| Dimension | CMS-HCC | HHS-HCC |
|---|---|---|
| Market | Medicare Advantage | Commercial ACA individual and small-group |
| Timing | Prospective: this year's diagnoses predict next year's costs | Concurrent: this year's diagnoses predict this year's costs |
| Ages covered | Medicare population, mostly 65 and older or qualifying through disability | All ages, with separate adult, child, and infant models |
| Pediatrics and maternity | Not scored in the payment model | Scored, including maternity categories |
| Drug factors | No prescription-drug factors in the score | Adds prescription-drug (RXC) factors |
| Payment mechanism | Higher score raises CMS payment to the plan | Higher score moves money between plans, budget neutral |
Concurrent vs prospective
HHS-HCC is concurrent: it uses diagnoses from the same benefit year to predict that year's costs. CMS-HCC is prospective: it uses one year's diagnoses to predict the next year's costs. That single difference changes when documentation has to be complete.
In Medicare Advantage, a condition documented in one year sets the member's payment for the following year, so capture work runs ahead of the payment it affects. In the ACA market the diagnoses and the costs belong to the same year, so a condition has to be documented inside the benefit year it applies to. There is no following year to true it up, which puts in-year capture under more pressure.
All ages and the sub-models
HHS-HCC scores all ages. It splits into separate adult, child, and infant models, and it includes maternity categories, because the ACA population runs from newborns to working-age adults. CMS-HCC is built for the Medicare population, mostly people 65 and older or qualifying through disability, so it is chronic-condition focused and does not score pediatrics or maternity in its payment model.
HHS-HCC also adds prescription-drug factors, the RXC categories, which let certain drug classes contribute to the score alongside diagnoses. That reflects an ACA population whose cost drivers often run through conditions managed primarily with medication, a layer the Medicare model does not carry in its payment score.
Budget-neutral transfers
ACA risk adjustment is budget neutral within a market. It moves money between plans rather than drawing new federal dollars: plans that enroll lower-risk members transfer funds to plans that enroll higher-risk members. A higher HHS-HCC score does not pull more money from HHS, it changes a plan's position in that transfer.
Medicare Advantage works the other way. A higher CMS-HCC score raises the payment CMS makes to the plan, so accurate capture there adds federal dollars to the contract. The categories and weights differ between the two models because the populations and the purposes differ, but the diagnosis-to-category logic is shared. What is opposite is the direction of the money.
How Pelica handles multi-model HCC mapping
Pelica is the AI-native execution layer for value-based care: one live member record and a copilot beside every team that owns a risk-bearing contract. Most platforms show you which gaps exist. Pelica works the gap and follows up until it is resolved.
The Risk Adjustment copilot maps each documented ICD-10 diagnosis to its condition category across model variants, CMS-HCC V24 and V28 for Medicare Advantage and HHS-HCC for the commercial ACA markets, so a member's score is read against the model that actually governs the contract. Pelica's flagship is a Medicare IPA, and the same data layer understands the HHS-HCC categories that commercial ACA plans run on. At HealthCare Partners, the largest IPA in the country, risk-adjustment coordination dropped from 30 minutes to 3 minutes per member, the same team now covers two to three times more members, across 175,000+ patients managed live.
Related terms
For the condition categories themselves, see HCC. For the score those categories sum into, see RAF. For the current Medicare model version and how it changed which codes count, see V28.