New Managed Care Findings from University of Pennsylvania Discussed (Unfairness toward rural beneficiaries in Medicare’s hierarchical conditions categories score): Managed Care

2025 OCT 02 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Researchers detail new data in Managed Care. According to news originating from Philadelphia, Pennsylvania, by NewsRx correspondents, research stated, “Risk adjustment is used in healthcare payment to mitigate the payer incentive to select for healthier populations and to improve fairness of quality assessment. The Centers for Medicare and Medicaid Services (CMS) has used a spending-based metric, the CMS Hierarchical Condition Category (HCC) score, to determine risk.”

Our news journalists obtained a quote from the research from the University of Pennsylvania, “However, the HCC score is potentially confounded by access and utilization differences, which are related to income and rurality. In this study, we investigate how related HCC scores are to mortality, a more objective indicator of clinical risk state, and whether that relationship differs between rural and urban populations. We examined calibration of the HCC spending model by calculating the predicted-to-observed spending ratio within deciles of the HCC score. We then compared urban and rural beneficiaries’ clinical risk by comparing observed mortality rates within deciles. Our results demonstrate that the HCC model underpredicts mortality, while overpredicting spending, for rural beneficiaries. In contrast, it is well-calibrated for urban beneficiaries.”

According to the news editors, the research concluded: “These findings suggest that risk models based on HCCs may systematically disadvantage rural beneficiaries because HCC-based risk-adjusted spending may not fully account for baseline clinical risk.”

This research has been peer-reviewed.

For more information on this research see: Unfairness toward rural beneficiaries in Medicare’s hierarchical conditions categories score. Health Affairs Scholar, 2025;3(9).

The news correspondents report that additional information may be obtained from Kristin A. Linn, Parity Center, Perelman School of Medicine, University of Pennsylvania, Philadelphia, PA 19104, United States. Additional authors for this research include Ravi B. Parikh, Junning Liang, Sae-Hwan Park, Torrey Shirk, Deborah S. Cousins, Caleb Hearn, Matthew Maciejewski and Amol S. Navathe.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1093/haschl/qxaf167. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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