V28 HCC Transition: Getting Payers Ready for 2026 Risk Accuracy and Compliance

The introduction of the CMS-HCC V28 risk adjustment model in 2026 is a critical juncture for payers navigating the dual imperatives of risk accuracy and compliance. This update, the most significant since the model's inception over a decade ago, revises how risk scores are calculated and directly impacts how health plans predict payment stability. Furthermore, this update reduces the total number of ICD-10-CM diagnosis codes by almost 7,000 and increases the number of Hierarchical Condition Categories (HCC) from 86 to 115, reflecting a major restructuring of the risk groupings. These changes will translate for payers into additional complexity around managing their RAF, making precision in coding, documentation, and compliance crucial as a means of revenue protection.

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What the New Model Changes for Payers

The V28 model redefines many chronic conditions, with major implications for disease categories that have driven payments. Conditions like diabetes, obesity, substance use disorders, and behavioral health diagnoses are either consolidated or split differently. This then lowers the overall RAF scores because many codes that were previously recognized no longer apply or have been combined into broader or narrower categorizations. This puts a deflationary pressure on payers' risk scores that upsets the predictability of payments. This calls for a higher order of clinical specificity and integrity in documentation to validate the diagnosis, as the CMS concentrates on an exact coding alignment with the severity of the patient's condition. What this really means is that payers will need to rethink their coding and documentation processes to fit the refinements under V28.

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The Financial and Compliance Impact

The financial and compliance stakes are high with this transition. Historical RAF score trends no longer predict actual payment performance, as the risk weights and groupings of the prior model have been overhauled. This disruption makes payments more volatile, complicating budgeting and revenue forecasting for health plans. Compounding this complexity, the Risk Adjustment Data Validation (RADV) program audit process for health plans regarding coding compliance is being ramped up. The recently updated final rules by CMS emphasize stricter enforcement; payers will have to endure tougher audits, along with higher clawback risks, if they fall behind in adapting to the requirements of V28. Payers will invite penalties and erosion of accurate risk capture with inconsistent coding practices or a continued reliance on outdated HCC versions. Enhanced compliance risk makes the need for payers to make overhauls in their clinical data capture and coding accuracy processes urgent with the new model rollout.

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Preparing for the 2026 Transition

To devise a strategic, proactive approach for effective transition to V28 in 2026, payers need to be able to focus on several key elements. First, retrospective analyses using the V28 specifications allow the modeling of how RAF scores might actually shift under the new system. This will enable health plans to project what the financial impact might be and pinpoint areas where their coding is most vulnerable. Coupled with predictive modeling, the deployment of AI-assisted tools is indispensable. These tools automatically identify dropped codes and suggest as alternatives valid codes aligned with the updated risk model, thus minimizing manual effort and spotting those errors that could cascade into revenue loss or audit findings. Alongside this, payers should work on standardizing the documentation workflow so that medical records fully support the diagnoses submitted. This standardization reduces inconsistencies and further strengthens compliance defenses.

The transition to V28 will rely on automated and transparent audit trails due to the overhaul that significantly tightening documentation requirements and reducing the number of codes eligible for risk adjustment payments. Tighter audits of RADV, combined with the emerging enforcement by CMS, require payers to clearly document every single coding decision and each step involved in the process for submission to defend against clawbacks and penalties. Automation streamlines audit preparedness and lessens administrative burdens that impede speedier responses to inquiries from CMS. It ascertains collaboration among the risk, quality, and compliance teams. This bond is paramount for operational cohesion in a landscape where accurate clinical documentation and audit readiness assume unprecedented importance under V28. Such integration and automation are necessary for payers to address expanded audit risks with confidence.

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How Galaxy Helps Payers Stay Compliant and Accurate

Galaxy addresses these critical needs through a single unified data model where claims, clinical, and chart data come together as one integrated system. Such a connected data environment means that payers can move away from incomplete and fragmented sources to a complete view of every diagnosis. The AI agents within Galaxy continuously analyze submissions for unsupported diagnoses or gaps in documentation. They don't just flag-it-and-forget-it but learn over time from the corrections made by reviewers in an ongoing cycle of dynamic improvement. Automated audit readiness functionality tracks each and every CMS submission with complete traceability, minimizing the risk of costly compliance failures. Capabilities such as these make Galaxy a trusted partner in handling the complexity of V28's expanded and restructured HCC categories so that payers can handle the transition with confidence. 

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How Galaxy Helps Payers Prepare for the V28 HCC Transition

As the 2026 V28 rollout deadline approaches, Galaxy arms payers with AI-driven risk accuracy and unified clinical data intelligence to smoothly transition from V24 to V28. It will automatically identify dropped or reclassified HCC codes, flag RAF score risks, and validate documentation against CMS logic for each diagnosis. In this connected platform, silos are eliminated, and each code is supported, compliant, and audit-ready. Galaxy's integrated predictive analytics and AI-assisted coding help payers safeguard revenue and maintain confidence through every submission cycle and are indispensable assets in transitioning to V28.

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Preparing for V28

The transition to 2026 CMS-HCC V28 involves far more than a simple coding update. It reconfigures payers' strategies regarding risk adjustment, compliance, and documentation. Delayed action exposes plans to revenue shortfalls, escalated audit penalties, and operational vulnerability. Conversely, payers that adopt an integrated, forward-looking approach powered by AI platforms such as Galaxy protect revenue, ensure regulatory compliance, and maintain audit readiness. Early and deliberate modernization of workflows, coupled with AI-driven code validation and enhanced documentation, builds resilience to thrive under the demands of V28. Embracing these innovations today sets payers on the path to smoother transitions, better risk analytics, and more predictable financial futures inside Medicare Advantage.

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‍Also Read: Beyond Automation: How Agentic AI Is Changing Risk Adjustment for Payers