Healthcare Insights

Hierarchical Condition Categories (HCCs) by CBSA

Factors such as rising healthcare costs, the prevalence of chronic health conditions and an aging population make value-based care reimbursement models an important focus for healthcare leaders to work on managing the cost of care. Government insurance programs like Medicare have introduced programs to address this type of reimbursement, such as Diagnostic Related Groups (DRGs) and Hierarchical Condition Categories (HCCs).

What are Hierarchical Condition Categories (HCCs)?

Hierarchical Condition Categories (HCCs) are part of a Centers for Medicare and Medicaid Services (CMS) risk-adjustment model that helps estimate future healthcare costs for patients. HCCs are mapped to ICD-10 codes, which are then used to score patients according to risk. Additional patient demographics such as age and sex are used to assign a risk adjustment factor (RAF) score. That score helps payors and the healthcare organization better forecast the cost of care.

How are HCCs used by hospitals and health systems?

Healthcare executives use HCCs to compare patient cases and patient loads to the overall average for the entire Medicare population. The average risk score is set at 1.0, where beneficiaries scoring greater than 1.0 expect above-average spending and those scoring less than 1.0 anticipate below-average spending.

The Definitive Healthcare HospitalView product features more than 960 core-based statistical area (CBSA) Market Overviews that include HCC scores. In the list below, we rank CBSAs by the highest HCC expected risk scores. This data is from CMS Public Use Files and updated on an annual basis.

Top 20 CBSAs by highest HCCs

RankCBSA IDCBSA nameAverage HCC scoreExplore dataset
139700Raymondville, TX1.64Explore
240100Rio Grande City, TX1.59Explore
332580McAllen-Edinburg-Mission, TX1.46Explore
415180Brownsville-Harlingen, TX1.35Explore
520580Eagle Pass, TX1.34Explore
610860Alice, TX1.32Explore
720940El Centro, CA1.28Explore
836380Okeechobee, FL1.27Explore
914220Bogalusa, LA1.26Explore
1029700Laredo, TX1.26Explore
1133100Miami-Fort Lauderdale-West Palm Beach, FL1.25Explore
1242820Selma, AL1.22Explore
1349820Zapata, TX1.21Explore
1413300Beeville, TX1.2Explore
1519620Del Rio, TX1.2Explore
1640460Rockingham, NC1.2Explore
1722420Flint, MI1.19Explore
1825780Henderson, NC1.19Explore
1926940Indianola, MS1.19Explore
2031300Lumberton, NC1.18Explore

Fig. 1 Data is from the Definitive Healthcare HospitalView product and sourced from CMS Public Use Files (PUF). Data accurate as of June 2022.

Which CBSAs have the highest HCC score?

Raymondville, Texas, in the southern part of the state, has the highest average HCC risk score among CBSAs at 1.64. Nearby, Rio Grande City, Texas, has the second highest HCC score at 1.59.

With 1.0 set as the benchmark HCC score, expected costs of patient care are higher for these regions. CBSAs in Texas make up the top six in this list and hold 10 spots overall. More than one CBSA in Florida and North Carolina also appear on the list.

What is a core-based statistical area (CBSA)?

A core-based statistical area (CBSA) is a geographic region of the U.S., defined by the Office of Management and Budget (OMB) in 2000. CBSAs are micropolitan or metropolitan urbanized areas, encompassing densely populated residential, non-residential and commercial land.

Micropolitan areas have a population of 10,000 to 50,000 people in an urban cluster, while metropolitan areas have one or more urban centers and a population of at least 50,000 people.  

What is an example of a core-based statistical area?

The three largest CBSAs by population are:

  • 35620 New York-Newark-Jersey City NY-NJ-PA
  • 31080 Los Angeles-Long Beach-Anaheim CA
  • 16980 Chicago-Naperville-Elgin IL-IN-WI

Why are core-based statistical areas important?

The Definitive Healthcare HospitalView product has profiles on more than 960 CBSAs that track the CBSA population and growth, the number of healthcare facilities within it and the CBSA’s total hospital net patient revenue, which are important components in understanding and targeting these key regions across the country.

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