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How Medicare V28 Coding Changes May Affect Dementia Detection

Let's recap recent CMS-HCC V28 coding changes that may create shortfalls for some conditions, while allocating more resources for Alzheimer's & dementia care.


The best way to illustrate the potential impact of the CMS-HCC V28 changes on dementia care is to share a tale of two providers. Recently we observed two very different reactions when presenting Neurotrack’s Cognitive Health Suite, a digital cognitive screening solution.

Provider A told us, “We know we’re underdetecting dementia, but times are tight. I don’t think we can prioritize this right now.”

Provider B said, “We know we’re underdetecting dementia and it’s one of our top priorities to address this year.”

So, what does Provider B know that Provider A doesn’t? Provider B explained, "We've made dementia screening a priority in part to make up for the V28 shortfall.” That’s right, with the new V28 model in effect, providers anticipate reimbursement shortfalls in many disease categories, but dementia is a different story.

A little background on Medicare and MA

Medicare is the government-funded payer of healthcare for older adults 65+. Medicare Advantage (MA) is a privately-managed option that just over half of older adults choose instead. A Risk Adjustment Factor (RAF) score determines how much the Center for Medicare and Medicaid Services (CMS) allocates to the Medicare Advantage Organizations (MAOs) per patient. Individuals who have more than one condition, or more complex conditions, have higher RAF scores. MAOs receive more money for the additional care these patients are likely to require.

So what exactly changed, and why?

In a way, we’re in the midst of a managed care recalibration. With the V28 model, CMS overhauled the way diseases and medical conditions are classified, coded, and reimbursed within MA. It’s an effort to reflect and accomodate changes in care utilization and diagnostic trends. And, generally speaking, it will require more careful documentation and specificity in diagnosing.

In brief: 

  • The V24 model of managed care used the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) diagnostic codes as the basis for hierarchical condition category (HCC) codes. 
  • In the V28 update, the newer ICD-10-CM is the reference. 
  • Total HCCs went up (from 86 to 115). 
  • Those 115 HCCs are split into 26 families of conditions.
  • Specific codes to map to each HCC diagnosis went down (from 9,797 to 7,770). 

What are the specific CMS-HCC V28 changes to dementia coding? 

In the old V24 model, dementia was classified as “complicated” (HCC 52) or “uncomplicated" (HCC 51). 
In the V28 model, those categories have been replaced with three buckets defined by severity. 
These new categories are: 
  • HCC 125 (Dementia, Severe)
  • HCC 126 (Dementia, Moderate) 
  • HCC 127 (Dementia, Mild or Unspecified)
Each of these new dementia HCCs has a RAF value of 0.341.

When did the change happen?

These CMS-HCC V28 coding changes are being phased in gradually over a 3-year period. This began with 2023 dates of service, when the change was first announced. We’re in the middle of this rollout.

  • In 2023: 33% from V28 and 67% from V24

  • In 2024: 67% from V28 and 33% from V24

  • In 2025: 100% from V28 

How will the CMS-HCC V28 model impact patient outcomes? 

We already know that cognitive conditions, from MCI to dementia to Alzheimer’s disease are massively underdiagnosed. We also know that dementia can be a multiplier of healthcare costby some estimates almost quadrupling the cost of care.

Now that PCPs can accurately record the severity of these conditions, it should lead to more motivation to screen cognition, determine the cause and level of impairment, and intervene early. Early detection is much better for patient outcomes. 

How will the CMS-HCC V28 model impact the business of healthcare?

With the changes of V28, some disease coding contracted, while dementia coding expanded. The US government has prioritized cognitive disease. They've created a National Plan to Address Alzheimer's Disease and CMS already requires that providers screen for cognitive impairment within Annual Wellness Visits. Now with the expanded coding, providers have further incentive to assess patients in a routine way and note the severity of their cognitive challenges. The new coding buckets also give providers a means to stop overlooking those mild, early cases and pursue a systematic cognitive screening strategy. This will ultimately lead to more accurate representation of Alzheimer’s and dementia prevalence, and more appropriate levels of reimbursement for the amount of care these complex patients require.

An investment in a solution like Neurotrack’s, that allows for detection of cognitive impairment at scale and speeds the diagnostic process, will assist in this effort.  In fact, any prioritization of this previously underdetected condition (as wise Provider B is doing!) will help healthcare stakeholders optimize their risk adjustment strategy.