Association of CMS‐HCC Risk Scores with Health Care Utilization among Rural and Urban Medicare Beneficiaries
The Centers for Medicare & Medicaid Services (CMS) use Hierarchical Condition Categories (HCC) and demographic information to calculate beneficiary risk scores, which predict expected Medicare spending by beneficiaries. CMS-HCC risk scores may be underestimating expected health care utilization among rural beneficiaries compared to urban beneficiaries. Incorrect estimation of expected health care utilization can lead to important financial losses for providers.
The NC Rural Health Research Program use Medicare claims data, this study, Association of CMS‐HCC Risk Scores with Health Care Utilization among Rural and Urban Medicare Beneficiaries, examines the relationship between CMS-HCC risk scores and future health care utilization among rural and urban beneficiaries.
CMS‐HCC risk scores are significantly and positively associated with increased acute inpatient stays, hospital readmissions, inpatient emergency room visits, and hospital outpatient emergency room visits among Medicare beneficiaries. After controlling for CMS‐HCC risk scores, rural beneficiaries generally had greater health care utilization than urban beneficiaries (e.g., more acute inpatient stays, more hospital readmissions, and more hospital outpatient emergency room visits). Overall, the results indicate that CMS-HCC risk scores provide utility in predicting patients that are expected to be more costly. However, the results also suggest that there are systematic differences in the risk adjustment model’s predictive capabilities in rural versus urban populations, as rural beneficiaries in our study generally had greater health care utilization even after controlling for risk scores. Going forward, policymakers might consider the possibility that Medicare provider payment models using CMS-HCC risks scores may underestimate the costs associated with treatment of rural beneficiaries.
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