At a Glance:

• Significant changes impacting the classification and reimbursement of specific medical conditions and diagnoses under Medicare Advantage plans were implemented by CMS in January 2024, moving from the previous V24 to the new V28.
• Dementia remains an HCC (Hierarchical Condition Category) in the new V28 with some minor but important changes.
• Primary care economics have undergone significant changes with the introduction of V28.
• Using the right tools, PCPs can enhance their ability to represent the severity of their patients’ conditions more accurately, leading to fairer and more appropriate reimbursement for the level of care provided.

As we stepped into the new year, healthcare professionals and insurance providers found themselves in the midst of significant changes impacting the classification and reimbursement of specific medical conditions and diagnoses under Medicare Advantage plans. These changes were driven by CMS’s comprehensive reevaluation of diagnosis categories, resulting in revisions, eliminations, and the restructuring of Hierarchical Condition Categories (HCCs) to align reimbursement practices with the complexity of patient conditions better.

CMS made a crucial decision to eliminate forty specific ICD-10-CM codes that had previously been associated with an HCC in version 24 but would no longer map to a payable HCC in version 28. The result? Economics have undergone significant changes with the introduction of V28, leading to:

• a substantial shift in how PCPs receive reimbursement for mental health codes and
• anticipated budget shortfalls for most groups when comparing V28 to V24.

This shift in economic landscape necessitates a proactive approach to financial planning and resource allocation in order to address the challenges posed by V28.

Provider Documentation: The Key to Accurate Dementia Classification

These significant changes underscore the pivotal role of provider documentation in ensuring accurate coding and reimbursement. Moreover, these shifts have far-reaching implications for healthcare professionals, insurance providers, and patients alike. Amid this backdrop of change, one area where precision is making a profound impact is in the classification of dementia cases for reimbursement purposes.

Traditionally, dementia had been broadly classified as either “complicated” or “uncomplicated.” However, a noteworthy transformation has occurred, driven by the desire to capture the genuine complexity of patient conditions. Healthcare professionals and coders have embarked on a new approach to categorize dementia cases, one that considers the severity of the condition. Under V28, dementia is categorized into three distinct HCCs:

• Dementia, Severe
• Dementia, Moderate and
• Dementia, Mild or Unspecified

The categorization is determined by the specific ICD-10 diagnosis codes associated with each patient’s diagnosis. What’s interesting to note is that all three levels of severity share the same Risk Adjustment Factor (RAF) value for reimbursement.

V24		V28
HCC	RAF*	HCC	RAF*
HCC 51 – Dementia with Complications	0.346	HCC 125 – Dementia, Severe	0.341
HCC 52 – Dementia without Complications	0.346	HCC 126 – Dementia, Moderate	0.341
		HCC 127 – Dementia, Mild or Unspecified	0.341

*Community, Non-Dual, Aged

Concurrently, some ICD-10 diagnosis codes that rolled up to HCC 52 under V24 no longer qualify for any HCC under V28. Notably, it has removed certain causes of dementia or dementia-like disorders from its classification. These exclusions encompass conditions such as Tay-Sachs disease, Krabbe disease, senile degeneration of the brain (unspecified), and degeneration of the nervous system due to alcohol (EtOH).

The ICD-10 codes that have been removed from V24 to V28 are:

Diagnosis Code	Description	V24 HCC	V28 HCC
E7500	GM2 gangliosidosis, unspecified	52	N/A
E7501	Sandhoff disease	52	N/A
E7502	Tay-Sachs disease	52	N/A
E7509	Other GM2 gangliosidosis	52	N/A
E7510	Unspecified gangliosidosis	52	N/A
E7511	Mucolipidosis IV	52	N/A
E7519	Other gangliosidosis	52	N/A
E7523	Krabbe disease	52	N/A
E7525	Metachromatic leukodystrophy	52	N/A
E7526	Sulfatase deficiency	52	N/A
E7529	Other sphingolipidosis	52	N/A
E754	Neuronal ceroid lipofuscinosis	52	N/A
F04	Amnestic disorder due to known physiological condition	52	N/A
G132	Systemic atrophy primarily affecting the central nervous system in myxedema	52	N/A
G138	Systemic atrophy primarily affecting central nervous system in other diseases classified elsewhere	52	N/A
G311	Senile degeneration of brain, not elsewhere classified	52	N/A
G312	Degeneration of nervous system due to alcohol	52	N/A
G3185	Corticobasal degeneration	52	N/A
G3189	Other specified degenerative diseases of nervous system	52	N/A
G319	Degenerative disease of nervous system, unspecified	52	N/A

These changes reflect the industry’s dedication to ensuring that the classification of dementia cases aligns with the true complexity of each patient’s condition, ultimately enhancing the quality of care provided and the accuracy of reimbursement.

Closing Thoughts

The healthcare reimbursement landscape is in a state of transformation, with CMS-driven changes aiming to align reimbursement practices with the intricate nature of patient conditions. The recalibration of dementia classification, in particular, signifies a shift towards precision and accuracy, with the ultimate goal of providing better care and fairer reimbursement. These changes impact not only healthcare providers but also insurance providers and patients, highlighting the importance of staying informed and adapting to this evolving healthcare environment.

These changes offer a unique opportunity for PCPs to leverage the evolving reimbursement rules to their advantage. By adapting their practices to align with the new coding and documentation requirements, PCPs can enhance their ability to represent the severity of their patients’ conditions more accurately. This, in turn, can lead to fairer and more appropriate reimbursement for the level of care provided.

Additionally, PCPs can use these changes as an opportunity to improve the quality of care they offer to patients with complex conditions like dementia. The more precise and nuanced classification system allows PCPs to tailor their treatment plans to meet the needs of patients better, ensuring they receive the right care at the right time. By staying informed about the latest updates and actively participating in the evolving healthcare environment, PCPs can position themselves to thrive in this new era of reimbursement.

For a list of ICD-10 diagnosis codes that roll up to V28 HCCs, please see our resource or download a copy of the PDF.