CMS 2025: What It Means for Risk Adjustment Coding—Equity, Accuracy, and the New Rules of the Game
Author: Emedlogix Editorial Team
Reviewed by: Clinical Coding Advisor, Emedlogix
Last Updated: June 19, 2025
Executive Summary
CMS is implementing major changes to risk adjustment in 2025, including the full adoption of HCC Version 28, a shift to blended RAF scoring, increased audit intensity, and pilots integrating social determinants of health (SDOH). These updates will affect coding strategy, compliance risk, and reimbursement outcomes for providers, payers, and ACOs alike.
This article is based on verified documentation from the Centers for Medicare & Medicaid Services (CMS), the CMS Innovation Center, and the HHS Office of Inspector General (OIG). It reflects final 2025 policies impacting Medicare Advantage and risk-bearing entities.
The content was reviewed by certified risk adjustment professionals, clinical documentation improvement (CDI) experts, and regulatory analysts at Emedlogix—who support healthcare organizations with CAC + NLP platforms built for audit readiness and real-time coding accuracy.
All insights are drawn from hands-on experience and publicly available government data. No claims are made without source references.
What Is Risk Adjustment—and Why Should You Care?
In value-based care and managed care models, providers are paid a fixed rate per patient. But not all patients need the same care—those with chronic or complex conditions require more resources.
Risk adjustment corrects this imbalance by assigning risk scores to patients using Hierarchical Condition Categories (HCCs) and demographic data. Higher scores lead to higher reimbursements, ensuring providers aren’t penalized for caring for high-need populations.
What’s Changing in CMS Risk Adjustment for 2025?
1. Full Rollout of CMS-HCC Version 28
As of January 1, 2025, CMS is fully adopting Version 28 of its risk adjustment model. The number of HCCs increases from 86 to 115, with revised condition groupings based on more recent claims data.
Impact: Coders must adjust documentation practices and coding logic for newly included or excluded conditions.
2. Medicare Advantage Shifts to 67/33 Blended RAF Scoring
CMS will calculate 67% of RAF scores using V28, and 33% using V24 in 2025. This phased approach smooths financial transition.
Impact: Plans must update forecasting models and understand how scoring differences affect risk pools.
3. ACO REACH Moves to Concurrent Risk Scoring
In 2025, ACO REACH uses concurrent-year diagnoses and demographics to calculate RAF scores. CMS applies a 3% cap (10% for high-needs groups) and limits coding intensity factors to 1.03.
Impact: Timely documentation and revalidation during the same year are essential.
4. Universal Annual MA Audits
All Medicare Advantage plans are now subject to annual CMS audits, no longer just a sample. These audits target unsupported diagnoses and inflated coding.
Impact: Every HCC must be backed by clinical documentation. Audit-readiness is non-negotiable.
5. Pilots for Social Determinants of Health (SDOH)
CMS is testing community-level SDOH data—such as housing instability or food insecurity—as payment adjusters. While not yet standard, this represents a shift toward health equity.
Impact: Providers may see new incentives tied to social risk, but must prepare for future data capture requirements.
Risk Adjustment’s Equity Dilemma
Risk adjustment has historically excluded factors like race, food access, or transportation barriers—despite their clear impact on health. As a result, some high-need populations are undercompensated due to systemic undercoding or care underutilization.
Community-level SDOH pilots are a promising start, but they still lack the granularity of individual data. CMS and industry leaders continue working to balance precision, fairness, and legality in integrating social risk into payment.
Why Accurate Coding Is Mission-Critical in 2025
In this new landscape, precision and transparency are essential. Risks include:
Missed HCCs → Lower RAF scores and lost revenue
Upcoding → Audit flags, clawbacks, reputational risk
Lapsed documentation → Dropped chronic conditions from RAF
AI without traceability → Non-compliance in audit settings
Solutions like Emedlogix CAC + NLP help organizations meet these challenges by auto-suggesting codes based on documentation, flagging recapture opportunities, and ensuring every HCC is audit-traceable.
What Should You Do Next?
Here’s how to prepare:
Coders: Retrain on HCC Version 28. Use smart tools to reduce variability and capture all compliant codes on time.
Payers & ACOs: Update RAF scoring models to account for the 67/33 blend. Prepare for concurrent risk tracking.
Compliance Leaders: Assess your documentation readiness. Ensure every HCC is supported and recaptured annually.
Executives: Evaluate your ability to track and respond to social risk data and prepare for equity-linked incentives.
Sources (Verified)
