HCC risk adjustment is a critical mechanism for health plans, particularly in Medicare Advantage and other value-based care models. It enables these plans to allocate financial resources more accurately based on the health status of their enrolled members. By assigning risk scores derived from patient diagnoses, health plans can better anticipate healthcare costs and ensure that resources are appropriately distributed to manage high-risk populations. Accurate coding and documentation are essential, as they directly influence reimbursement rates and financial stability. Additionally, effective HCC management helps health plans identify areas for care improvement, enhance patient outcomes, and maintain compliance with regulatory requirements. Overall, HCC risk adjustment empowers health plans to provide more tailored, efficient care while managing costs effectively.