Understanding v28 Medicare Advantage Plans and Benefits
Decoding the CMS-HCC V28 Risk Adjustment Model: What Makes It Revolutionary?
The Centers for Medicare & Medicaid Services (CMS) introduced the V28 version of the CMS-HCC (Hierarchical Condition Category) risk adjustment model in 2024, representing one of the most substantial overhauls in Medicare Advantage (MA) risk adjustment in over a decade. The primary aim behind this shift is to improve payment accuracy and reduce overpayments, which have been a persistent issue with earlier models.
What Sets V28 Apart? The V28 model brings a new methodology for capturing patient risk by refining how diagnoses are mapped to payment categories. Compared to its predecessor (V24), V28 is more selective, targeting diagnosis coding patterns that previously led to overestimation of patient illness, thus contributing to excessive payments to plans. The ultimate objectives include:
- Enhancing Payment Accuracy: By using more accurate and timely data, V28 adjusts future payments to align more closely with the actual health status of Medicare beneficiaries.
- Reducing Overpayments: CMS estimates overpayments in the billions every year, attributed to inflated risk adjustment factor scores. V28 directly addresses these issues by revising condition category definitions and mapping rules.
- Streamlining Plan Reimbursement: By honing in on conditions that demonstrably influence care costs, the V28 update helps ensure the Medicare Trust Fund is used efficiently.
This significant revision is being phased in gradually—33% in 2024, 66% in 2025, and reaching full implementation in 2026—to provide time for both plans and providers to adapt financially and operationally.
Expanding and Refining Diagnosis Code Mapping: What Changed in HCC Codes?
One of the major features of the V28 Medicare Advantage update is the expansion and refinement of how diagnosis codes are mapped to payment categories, known as HCCs (Hierarchical Condition Categories).
From 86 to 115 Condition Categories
The V28 model increases the number of condition categories significantly—from 86 in V24 to 115. This allows for finer differentiation among patient health conditions, leading to more precise risk assessment and payment adjustments.
Fewer Diagnosis Codes Mapped to Payment
While the number of HCCs expanded, the total count of diagnosis codes eligible for payment actually decreased, dropping from 9,797 to 7,770. This pruning was intentional, as CMS sought to eliminate codes not reliably tied to increased healthcare costs.
Key Additions and Removals
| Change | V24 | V28 | Rationale |
|---|---|---|---|
| HCCs | 86 | 115 | Greater clinical precision |
| Diagnosis codes mapping to payment | 9,797 | 7,770 | Focus on relevant and predictive codes |
| Removed codes | – | 2,200+ | Reduce overpayment risk |
| Newly added codes | – | 268 | More accurately reflect cost-driving conditions |
Stricter Chronic Condition Coding
Chronic conditions—such as diabetes, depression, and vascular disease—now require more specific or subdivided coding. This reduces the risk of overstating disease severity and curbs the incentive for plans to seek higher payments through aggressive coding.
For those seeking a deeper understanding of their Medicare options, including how these coding changes impact coverage, you may find our guide on how to sign up for Medicare valuable.
Understanding Risk Adjustment Factor (RAF) Score Adjustments and Payment Implications
Under the V28 model, the process for calculating each beneficiary’s risk adjustment factor score has changed. RAF scores are crucial: they determine payment rates for Medicare Advantage plans based on the predicted health costs of their enrollees.
RAF Score Adjustments
Because V28 is more selective and requires tighter coding, the average RAF score is expected to drop across the industry—even when the underlying health status of the population remains unchanged. This directly leads to lower plan payments.
- Lower Average RAFs: Plans receive less reimbursement, forcing tighter budget controls or benefit reforms.
- CMS Intentionality: This is by design—CMS is adjusting payments downward to reduce roughly $17 billion per year in estimated overpayments.
- Industry Revenue Impact: Many plans—and especially large insurers—expect noticeably reduced revenue in 2024–2025, shaping their offerings and potentially their costs to beneficiaries.
- Phased Transition: To soften the impact, CMS is implementing the new rules gradually:
- 33% weight V28 model (2024)
- 66% weight V28 (2025)
- 100% V28 model in 2026
This staggered approach gives the industry time to adapt while protecting millions of MA enrollees from abrupt disruptions.
The Ripple Effect on Medicare Advantage Plan Offerings and Supplemental Benefits
The transition to V28 is already showing measurable impacts on Medicare Advantage plan options and the supplemental benefits population can access.
Downward Trend in Plan Availability
For 2025, there is a reported 2.8% national reduction in available MA plans, reflecting the financial adjustments plans are making to align with new reimbursement realities.
Supplemental Benefit Adjustments
There’s an observable tightening of non-essential supplemental benefits, particularly those targeting clinical and social risk factors. Benefits traditionally offered to cater to highly vulnerable populations—transportation, meal delivery, and in-home supports—are being trimmed in some areas.
Stability of Core Benefits
Fortunately, essential health extras remain steady. Most beneficiaries still have access to:
- Dental care
- Vision services
- Hearing care
Rising Out-of-Pocket Maximums (MOOP)
The 2025 median maximum out-of-pocket (MOOP) expense for MA enrollees is climbing from $5,000 to $5,400, increasing the potential financial burden on some seniors.
Alignment With Traditional Medicare
V28 also supports CMS’s goal of harmonizing risk adjustment methods between MA and fee-for-service Medicare. This ensures that regardless of whether someone is in an MA plan or original Medicare, the method of assessing health risk and assigning payment is consistent and fair—an important move for program integrity.
If you want to better understand how supplemental coverage fits in with these changes, our article on Medicare Medigap plans provides a useful comparison.
Real-World Applications: Industry Adaptations and Beneficiary Impacts
The phased adoption of V28 is having tangible effects both for the healthcare industry and the millions of Medicare Advantage beneficiaries across the country.
Case Study: UnitedHealth Group
In early 2025, UnitedHealth Group, one of the nation’s largest MA insurers, reported that the transition to V28 had significantly reduced their Medicare Advantage earnings, despite no change in their enrollees’ health status. The lower RAF scores meant plans received less per enrollee, compelling the company to reassess product designs and financial forecasts.
Provider Strategies: Technology and Training
Healthcare organizations are deploying advanced AI-driven tools to help ensure all valid diagnoses are captured accurately under V28’s stricter rules. These tools support clinical decision-making and streamline coding processes, helping offset potential revenue losses. Provider training is also a high priority to reduce errors in documentation and ensure compliance with updated coding workflows.
Beneficiary Experience
Roughly 2 million beneficiaries will need to select a new plan in 2025 due to plan discontinuations or market consolidations. This shift limits plan choice in certain regions and may increase out-of-pocket costs for affected enrollees. For some seniors, the change may even lead to higher out-of-pocket costs as MOOP limits rise and benefit offerings change.
Staying informed about plan changes as they relate to your healthcare needs is essential—if you’re searching for local provider options, see our page on Medicare doctors near me.
Meeting Compliance: Documentation and Coding Accuracy Best Practices in the V28 Era
Compliance in the V28 environment is about more than just correct billing—it’s also about defensible documentation and adherence to stricter coding guidelines. Here’s how providers are ensuring best practices:
Precise Documentation Is Essential
Every diagnosis must be supported by clinical evidence in the patient record. With V28’s narrower code set, there’s no room for vague or “rule out” diagnoses. Providers must:
- Regularly train staff and audit coding workflows
- Engage with clinical documentation improvement (CDI) programs
- Utilize CMS and third-party guidance for ambiguous scenarios
Strategies to Prevent Revenue Loss
With Medicare Advantage payments increasingly tied to specific, actionable diagnoses, providers are:
- Using EHR-integrated AI tools to detect and prompt for complete coding
- Emphasizing annual wellness visits to ensure all conditions are recognized and coded every year
- Reviewing and correcting documentation deficiencies proactively
Resources for Updated Rules
Providers are encouraged to:
- Consult the latest CMS documentation on the V28 risk adjustment model
- Use published industry whitepapers for coding tips and compliance checklists
Frequently Asked Questions About V28 Medicare Advantage Plans and Benefits
How will the V28 model impact the benefits offered by Medicare Advantage plans?
The V28 model is resulting in some reduction or restructuring of supplemental benefits, especially those related to social or clinical risk. While core offerings like dental and vision remain stable, discretionary extras may be scaled back or offered with higher copays as plans adjust to lower reimbursement rates.
What are the main differences between V24 and V28 in terms of risk adjustment?
V28 features more HCCs (115 vs. 86) and a much more selective set of diagnosis codes mapped to payment (down to 7,770), resulting in lower risk adjustment factor scores on average and—critically—a closer alignment between payment and actual risk.
How are providers adapting to the changes introduced by the V28 model?
Providers are investing in coding education, advanced health IT, and clinical documentation improvement programs to ensure that patient conditions are thoroughly captured. This helps maximize appropriate revenue despite stricter coding rules.
What specific changes were made to the HCC codes in V28?
V28 saw over 2,200 diagnosis codes removed, 268 codes added, and introduces tighter criteria for coding certain chronic illnesses—especially diabetes and depression—aiming for a more predictive, cost-aligned payment model.
How will the V28 model affect the reimbursement rates for Medicare Advantage plans?
Reimbursement rates are expected to decrease as average RAF scores decline under the new, narrower set of eligible codes and more differentiated condition categories. This aims to prevent overpayments and divert resources to those with true, high-cost illness.
Anticipating Future Developments: What to Expect as V28 Reaches Full Implementation in 2026
Looking ahead, the effects of V28 will not be static. CMS will continue to adjust the methodology based on real-world findings and feedback from both plans and beneficiaries. The full impact—on plan design, supplemental benefit offerings, and overall market competition—will become clearer as the model reaches 100% implementation in 2026.
Ongoing Adjustments From CMS
With continuous monitoring, CMS may:
- Refine HCC mappings as new evidence emerges
- Reward plans that demonstrate high-quality, value-based care
- Introduce guardrails to protect vulnerable populations from excessive out-of-pocket costs
Preparing Stakeholders
MA plans, providers, and beneficiaries should remain adaptable and informed about ongoing regulatory and payment changes. Early engagement with Medicare resources and local healthcare consultants can ease future transitions. If you are just beginning to explore your Medicare options, be sure to review our comprehensive guide on how to apply for Medicare to ensure a smooth enrollment experience.
As the healthcare landscape continues to evolve alongside Medicare’s risk adjustment strategies, proactive education and responsive planning will be critical for everyone involved in the Medicare Advantage ecosystem.
