In brief: Medicare pays Medicare Advantage plans more for members with more serious chronic conditions. Those conditions are identified from ICD-10-CM codes that map to Hierarchical Condition Categories (HCCs). Risk adjustment coders review medical records to confirm that every reported condition is documented and supported, and that nothing unsupported is reported. The AAPC CRC® is the main credential for this work.
How does risk adjustment work?
CMS uses a risk adjustment model to predict each Medicare Advantage member's expected cost. Diagnoses documented during face-to-face encounters with acceptable provider types are coded in ICD-10-CM; the relevant codes map to HCCs, and the HCCs, combined with demographic factors, produce a risk score. Higher scores mean higher payments to the plan. Conditions must be documented and coded again each calendar year to count.
CMS moved to a revised CMS-HCC model, known as V28, over three payment years; payment year 2026 is the first year it applies fully. V28 changed which diagnoses map to payment HCCs, so coders must stay current.
A worked chart review example
"72-year-old Medicare Advantage member. COPD, stable on tiotropium. Chronic systolic heart failure, echo reviewed, continue furosemide. Morbid obesity, BMI 42, dietary counselling given. Breast cancer treated in 2019, completed therapy, no evidence of disease."
| Condition | Code | Decision |
|---|---|---|
| COPD on maintenance inhaler | J44.9 | Report: condition assessed and treated |
| Chronic systolic heart failure | I50.22 | Report: evaluated (echo) and treated |
| Morbid obesity with BMI 42 | E66.01, Z68.41 | Report: provider documented the obesity diagnosis and counselled; BMI is secondary |
| Breast cancer, treatment completed | Z85.3 (not C50.-) | Report as personal history only: no current treatment or active disease |
Coding the old breast cancer as an active malignancy would raise the risk score without support. Unsupported cancer, stroke and heart attack diagnoses are among the errors the HHS Office of Inspector General has repeatedly flagged in its audits of Medicare Advantage risk adjustment data.
What is MEAT?
MEAT stands for Monitor, Evaluate, Assess (or Address) and Treat. It is a widely used industry convention, not a CMS regulation, for checking whether a documented condition was actually managed during the encounter. For example, "CHF – continue furosemide, echo reviewed" shows evaluation and treatment; a bare problem-list entry with no mention in the note usually does not. Different organizations use MEAT or similar frameworks, and coders follow their client's policy alongside the official guidelines.
Why is accuracy under so much scrutiny?
CMS runs Risk Adjustment Data Validation (RADV) audits that compare submitted diagnoses with medical records and can recover overpayments, and in 2025 it announced a major expansion of those audits. The OIG and Department of Justice have also pursued Medicare Advantage organizations over unsupported diagnoses. This is why plans invest in experienced, certified risk adjustment coders and auditors.
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Get free guidanceWho makes a good HCC coder?
Risk adjustment rewards clinical understanding of chronic disease: diabetes and its complications, heart failure, COPD, chronic kidney disease, depression and other conditions, along with the medicines used to treat them. Pharmacy, nursing, AYUSH and medical graduates tend to learn it quickly. Read more on our page for pharmacy and nursing graduates.
What is the CRC credential?
AAPC's Certified Risk Adjustment Coder (CRC®) tests ICD-10-CM coding for risk adjustment, documentation requirements and compliance. Many coders take it after or alongside the CPC. Check aapc.com for current exam details. Compare it with other credentials on our certification page.
What do HCC coders earn?
In India, certified risk adjustment coders commonly earn in line with or slightly above general outpatient coders at the same experience level, and experienced HCC auditors and quality analysts earn more. See indicative figures on our salary page.
Frequently asked questions
Is HCC coding good for freshers?
Yes, especially for pharmacy, nursing and medical graduates. Some employers hire certified freshers directly into risk adjustment teams.
Do I need CPC before CRC?
No. The CRC can be taken on its own. Many learners take CPC first because it opens more job types, then add CRC.
Is risk adjustment coding only for Medicare?
Medicare Advantage is the largest program, but risk adjustment is also used in some Medicaid managed care and ACA marketplace programs, which use their own models.