Hierarchical Condition Categories

Acronym: HCC

Groupings of clinically similar diagnoses used by risk adjustment systems in the Medicare-Advantage (CMS-HCC model) and the ACA Marketplaces (HHS-HCC model). Condition categories (CCs) are categorized hierarchically and the highest severity takes precedence over other conditions in a hierarchy (forming an HCC). Each HCC is assigned a relative factor that is used to produce risk scores for Medicare beneficiaries or ACA Marketplace plan enrollees, based on the data submitted in the data collection period. HCCs were originally developed in the mid-1980s by health services researchers at Boston University who developed the Diagnostic Cost Group (DCG) risk adjustment model. The DCG system has spawned the CMS-HCC risk adjustment model used by Medicare Advantage since 2004 and HHS-HCC model used by the ACA Marketplace issuers since 2014.