Overview
RxHCC is the prescription-drug analog to the CMS-HCC model. Where CMS-HCC adjusts Medicare Advantage Part C payments for medical-cost variation, RxHCC adjusts Part D prescription drug plan payments for variation in expected drug spending. The two models share a diagnosis-to-category mapping architecture but produce distinct risk scores with different coefficients; a member's medical RAF and Rx risk score are independent numbers.
Version 08 of the RxHCC model has 84 payment categories calibrated to Part D spending patterns. Categories that strongly predict prescription cost — diabetes with complications, rheumatoid arthritis, HIV, multiple sclerosis, cystic fibrosis, transplant status, and several cancer categories — carry substantially higher coefficients than they do in the medical model. Conversely some medically expensive conditions (certain surgical histories, acute injuries) carry lower Rx coefficients because they are less predictive of ongoing drug spend.
Part D plans use RxHCC scores to price bids and reconcile payments with CMS. Because Part D operates on a separate payment stream from Part C, plans that also offer Medicare Advantage Prescription Drug (MAPD) plans must maintain both CMS-HCC and RxHCC accuracy simultaneously. An MA-PD member's chart review therefore typically targets both risk-adjustment models — a single chart validation effort can support recapture in both.
Payment-year mechanics mirror the medical model. RxHCC uses diagnoses from the prior calendar year to set prospective payments for the current year, with mid-year reconciliation and final reconciliation after CMS reviews encounter submissions. The Encounter Data Processing System (EDPS) is the submission pathway. Submission deadlines and reopening windows track the medical model, so risk-adjustment teams generally align processes rather than maintain parallel workflows.
Diagnosis sources follow the same rules in both models. For payment year 2027 CMS calculates RxHCC scores for organizations other than PACE, like their CMS-HCC scores, only from risk adjustment-eligible diagnoses in encounter data and fee-for-service claims, and for all organizations it excludes diagnoses from audio-only services billed with modifier 93 or FQ (CY2027 Rate Announcement). Documentation that supports a diagnosis for one model therefore supports it for the other.
Operationally, providers rarely interact with RxHCC directly — it is primarily a plan-side payment mechanic. But provider organizations participating in MA-PD shared-risk arrangements should understand the model because coding practices that improve CMS-HCC capture generally improve RxHCC capture as well.
The model is recalibrated periodically by CMS. For payment year 2027 CMS uses a version calibrated on 2023 diagnoses and 2024 drug costs, with separate factors for MA-PD plans and standalone PDPs that reflect the Inflation Reduction Act changes to the Part D benefit (CY2027 Rate Announcement).
Industry benchmark
RxHCC relative factors are predicted Part D costs divided by a Part D denominator ($2,544.56 for the 2023/2024 calibration in the CY2027 Rate Announcement). For payment year 2027 CMS divides raw scores by a normalization factor of 1.109 for MA-PD plans and 1.005 for standalone PDPs, and 1.237 for the 2018/2019 calibration used for PACE organizations.
Worked example
An MA-PD plan has 80,000 members. Post-chart-review, the team recaptures 3,200 diabetes-with-complications diagnoses also predictive in the RxHCC model. Average Rx risk increases by 0.04, lifting the per-member Part D direct subsidy by about $85 annually — roughly $6.8M of incremental Part D revenue for the plan year on top of the Part C CMS-HCC revenue gain from the same recapture effort.
Look it up in CMS data
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Frequently asked questions — RxHCC (Prescription Drug Hierarchical Condition Category)
Is RxHCC the same as CMS-HCC?
No. Both are CMS risk-adjustment models, but RxHCC sets Part D drug plan payments while CMS-HCC sets Part C medical payments. They share diagnosis-mapping architecture but have different coefficients and category structures.
Do providers need to code for RxHCC specifically?
No separate coding — RxHCC uses the same ICD-10-CM diagnoses as CMS-HCC. But providers participating in MA-PD risk-sharing should confirm the ICD-10-CM codes they submit capture conditions predictive of drug spend, not just medical spend.
How often is the RxHCC model recalibrated?
CMS proposes model changes in the annual Advance Notice and finalizes them in the Rate Announcement. For payment year 2027 it moved plans other than PACE organizations to a calibration on 2023 diagnoses and 2024 costs with separate MA-PD and PDP factors. Plans model the bid impact each cycle.
Disclaimer
This glossary entry is operational reference for revenue-cycle and medical-billing professionals. It is not legal, clinical, or contractual advice. Industry benchmarks cite named public sources where available; always verify against the current guidance from the authority body before relying on a number in a contract, policy, or compliance filing.