How Prospective Risk Adjustment Supports Better Patient Care

Risk adjustment determines how Medicare Advantage plans and value-based care organizations are funded for the patients they serve. When a patient's conditions are accurately documented, the plan receives appropriate payment and directs the right resources toward that patient's care. When documentation falls short, care planning follows. Prospective risk adjustment fixes this by identifying patient health complexity before the next care period begins, not after problems surface. With CMS-HCC V28 fully in effect for 2026, what gets documented today directly shapes how patients are managed tomorrow.

Why Timing Changes Everything

Healthcare risk adjustment runs in two modes: prospective and concurrent. The difference is when patient data is used.

A concurrent model uses current-year diagnosis data to calculate that same year's costs, leaving little room for early intervention. A prospective model uses prior-year data to anticipate patient needs before a new care period begins. CMS uses the prospective model for Medicare Advantage and most ACO arrangements.

Diagnoses documented during 2025 encounters determine how patients are resourced in 2026. That timing creates a clinical opportunity. Providers who know which conditions are on record and which are missing can identify patients who need active management before problems escalate, not after.

Risk Scores and What They Mean for Patients

CMS calculates risk adjustment scores through the Hierarchical Condition Categories model, or CMS-HCC. Diagnosis codes map to HCC categories, each carrying a relative cost weight. Age, sex, and disability status are factored in alongside diagnoses to produce a Risk Adjustment Factor score.

A patient with average health complexity scores 1.0. Those with multiple chronic conditions can reach 2.5 to 4.0. That score determines how much funding flows toward managing that patient's care.

When conditions go undocumented, the RAF score drops. So does the funding allocated for care coordination, chronic disease management, and preventive services. Accurate documentation is not just a billing function. It is what ensures patients receive care proportionate to their actual needs.

What Prospective Coding Does at the Care Level

When chronic conditions and documentation gaps are identified before the next care period opens, providers can act on them rather than react to them later. A patient with incomplete diabetes and chronic kidney disease documentation gets flagged for a targeted follow-up. An annual wellness gap gets closed during the encounter rather than discovered in a year-end chart review.

This shifts documentation from back-end correction to front-end clinical engagement. What that means in practice:

• High-risk patients are identified earlier in the care cycle
• Active chronic conditions are more completely captured at the point of care
• Care coordination improves when the full condition picture is on record
• Patients with complex needs are less likely to be under-resourced due to documentation gaps

Documentation Specificity Under V28

For 2026, risk scores are calculated entirely under CMS-HCC V28, completing a three-year phase-in. V28 requires greater documentation specificity than its predecessor. A note reading "diabetes" without specifying type and complication does not map to the same HCC as "Type 2 diabetes mellitus with diabetic chronic kidney disease."

That gap in documentation reflects a gap in how the system understands and funds that patient's care. Conditions that are actively managed but vaguely documented may not register under V28 at all, which means the patients carrying those conditions receive less targeted support going into the next performance year.

Conclusion

Prospective risk adjustment supports better patient care because it moves identification and documentation upstream. When conditions are on record before the care period begins, providers plan with a complete clinical picture rather than filling gaps mid-year. Organizations that maintain accurate, continuous healthcare risk adjustment workflows are better positioned to serve complex patients and fund that care appropriately.

Persivia's digital healthcare platforms support organizations in managing risk adjustment workflows, identifying HCC coding gaps, and maintaining population health visibility throughout the year. For Medicare Advantage plans and ACOs where documentation directly shapes patient outcomes, that kind of structured risk adjustment solution keeps care planning and financial performance aligned. 

What The MSSP 2026 Changes Mean For Small ACOs?

Small ACOs have always operated under tighter margins and fewer administrative resources than larger health systems. The MSSP 2026 Proposed Rule adds a new layer of pressure. CMS is accelerating the timeline for risk adoption, revising how beneficiary minimums work, and removing certain quality score adjustments that smaller organizations have relied on. Understanding what changed and what it demands operationally is the first step before performance years begin.

The Push Into Risk Is Getting Faster

The most consequential change in the MSSP 2026 Proposed Rule is the reduction in how long an ACO can stay in a one-sided risk arrangement.

Previously, ACOs could remain in the BASIC track's one-sided model for up to seven performance years. Under the finalized rule, that window has been cut.

CMS will cap participation in the BASIC track's one-sided model to a maximum of five performance years during the ACO's first agreement period, down from the current maximum of seven years. This change applies to agreement periods beginning on or after January 1, 2027.

For smaller ACOs still building infrastructure and care management capacity, this compressed timeline is significant. The gap between understanding risk-based contracts and being financially ready for them is real, and two fewer years to prepare narrows that gap considerably.

Beneficiary Minimum Rules Get More Flexible (With Limits)

On the more favorable side, CMS adjusted how the 5,000-beneficiary minimum is applied. Under the MSSP 2026 Proposed Rule, CMS is easing beneficiary assignment rules by requiring ACOs to meet the 5,000-beneficiary minimum only in the third benchmark year, rather than every benchmark year. This gives smaller and rural ACOs more room to grow their assigned population before facing compliance pressure.

That said, there are conditions attached:

• ACOs that drop 5,000 beneficiaries below in any benchmark year must participate only in the BASIC track
• They face caps on shared savings and losses
• They are excluded from benefits designed for low-revenue organizations
• They cannot participate in the ENHANCED track

So while the flexibility is real, it comes with restrictions that limit what smaller ACOs can access in terms of program benefits and track options.

The Health Equity Adjustment Is Being Removed

Starting performance year 2026, the health equity adjustment (HEA) applied to ACO quality scores will be discontinued.

CMS reasons that other mechanisms already cover similar ground, specifically, the Complex Organization Adjustment, the eCQM/MIPS CQM reporting incentive, and flat benchmarks for Medicare CQMs in their first two performance periods.

For ACOs serving high proportions of dually eligible or low-income beneficiaries, this matters. The HEA was designed to account for the challenges of serving these populations. Its removal shifts the burden of maintaining quality scores to the remaining adjustments, which may not fully compensate in every case.

Beneficiary Assignment Now Includes Behavioral Health Codes

CMS is updating what counts as a primary care service for beneficiary assignment purposes.

Beginning January 1, 2026, new behavioral health integration and psychiatric Collaborative Care Model add-on services will be included in primary care service definitions. This means that they are furnished alongside Advanced Primary Care Management services.

This has a practical upside for ACOs investing in integrated behavioral health. More services count toward assignment, which can improve the alignment between Medicare CQM-eligible beneficiaries and the ACO's assignable population.

Quality Reporting: What's Changing

The MSSP 2026 Proposed Rule carries several quality reporting updates that affect day-to-day operations:

• The APP Plus measure set adds colon cancer screening for 2026
• CMS begins monitoring compliance with the alternative quality performance standard in 2026 and may take enforcement action for ACOs failing to meet either standard
• The CAHPS for MIPS Survey will move to a web-mail-phone protocol beginning with performance year 2027, replacing the current mail-phone method.
• CMS is expanding Extreme and Uncontrollable Circumstances (EUC) policies to cover cyberattacks, including ransomware and malware, effective in 2025

The EUC expansion is worth noting given how frequently healthcare organizations face cybersecurity incidents. ACOs affected by qualifying events can now seek relief on both quality and financial performance calculations.

What Small ACOs Need to Do Now

The combined effect of these changes puts pressure on smaller ACOs to move faster on several fronts. A few practical areas to address:

• Review the agreement period history to determine when the five-year one-sided risk cap will apply to your organization
• Assess beneficiary population size and track eligibility before the next benchmark period
• Confirm quality reporting pathways for Medicare CQMs and eCQMs under the updated APP Plus framework
• Strengthen cybersecurity protocols to ensure eligibility for EUC relief if needed

These are not abstract policy questions. Each one has a direct operational and financial implication.

Final Call

The MSSP 2026 Proposed Rule reflects CMS's broader direction: fewer extended timelines, more accountability, and a faster path into risk-based participation. For small ACOs, that means less runway and more decisions to make in a shorter period.

Managing these transitions requires more than policy awareness. It requires real-time data on assigned populations, quality measure performance, and financial exposure across tracks. Persivia's healthcare platforms support ACOs in building that operational foundation, from data aggregation and care gap identification to quality reporting workflows and population health management. For ACOs navigating the demands of the MSSP 2026 Proposed Rule, having the right infrastructure in place is what makes the difference between reacting to changes and staying ahead of them. 

Learn more about Persivia & its solutions.

The Metrics That Actually Predict Value-Based Care Success

Most organizations managing value-based contracts track dozens of metrics. The ones that actually predict value-based care success are a much shorter list. These are the numbers that show where a program is heading during the performance year, not the ones that confirm what went wrong after reconciliation closes. Watching the right metrics and watching them on current data is what gives organizations room to respond rather than just report.

Readmission Rates Tell You More Than You Think

A 30-day readmission rate is a window into how the full care continuum is functioning. Discharge planning, post-acute coordination, medication management, and follow-up care all show up in that single number.

When the rate starts moving up, it's rarely one thing. The post-discharge window isn't being actively managed. High-risk patients aren't getting a follow-up call within 7 days. A handoff between the hospital and an SNF is breaking down, and nobody catches it until the patient is back in the ED.

Tracking readmissions by attending physician, diagnosis group, and discharge destination shows which part of the process is failing, rather than leaving the team to manage a blended rate that points nowhere specific.

Care Gap Closure Rate by Measure

How consistently your organization closes HEDIS and Stars care gaps throughout the year is a direct predictor of value-based care success. The organizations that perform well at year-end aren't closing gaps in a fourth-quarter sprint. They're closing them steadily across every quarter.

What the Rate Actually Shows

A care gap closure rate tracked in real time shows which measures are on track and which are falling behind while there's still time to redirect outreach. It shows which providers are closing gaps at their visits and which aren't. It shows whether specific patient cohorts are consistently being missed.

Metrics worth tracking at the measure level:

• Numerator completion rate by provider and site
• Outstanding gap volume by measure and patient cohort
• Gap closure rate by month compared to prior year pacing
• Percentage of gaps closed within the performance period versus carried over

HCC Capture Rate and Risk Score Accuracy

Risk adjustment revenue under value-based contracts depends directly on how accurately a patient's clinical complexity is documented. An HCC capture rate running below the population's actual clinical profile means benchmarks are narrower than they should be, and the financial margin tightens before the performance year starts.

Tracking which HCC codes are being documented at visits, which suspected conditions are going uncaptured, and which providers have the widest documentation gaps gives organizations a way to manage risk score accuracy as an ongoing process rather than a year-end chart review exercise.

Total Cost of Care Trend by Cohort

Value-based care success at the contract level comes down to whether the total cost of care stays within the benchmark. Tracking cost trends by patient cohort, condition group, and provider throughout the year shows where spending is running ahead of projections while adjustments are still possible.

Key cost metrics to watch actively:

• Total cost of care versus benchmark by contract and quarter
• Inpatient and ED utilization rate per 1,000 attributed members
• Post-acute spend as a percentage of total episode cost
• High-cost claimant concentration and year-over-year trend

Organizations that see cost trends mid-year can shift care management intensity toward the cohorts driving spend. Those who review cost performance at reconciliation are looking at a fixed outcome.

Care Management Reach and Engagement

A care management program that consistently misses its highest-risk patients produces predictable results. Outreach completion rates, engagement rates by risk tier, and the share of high-risk patients with active care plans show whether the program is covering the population it's supposed to be covering.

Low engagement in the top risk tier tends to show up in utilization data a few months later. High engagement is typically what precedes a good reconciliation result.

Bottom Line

The metrics above matter only if they update frequently enough to act on. Quality reporting that runs quarterly, cost data arriving with a claims lag, and care gap tracking that resets monthly all produce numbers that describe history rather than inform decisions.

Persivia's CareSpace® tracks all of these metrics against live data in one environment. HEDIS and Stars measures update as qualifying encounters are documented. HCC gaps surface at the point of care. Cost and utilization trends run against contract benchmarks throughout the year. For organizations where value-based care success depends on acting within the performance period, the difference between current data and lagged data is often the difference between a shared savings distribution and a performance shortfall.

Key ACO Cost Drivers to Control for Value-Based Care Success

As of January 2026, 14.3 million Medicare beneficiaries receive care through ACOs, and the financial pressure on those arrangements has grown steadily. Shared savings models reward ACOs that keep the total cost of care in check. Those who don't absorb the difference. The organizations pulling ahead aren't necessarily the largest or best-resourced. They're the ones that know where their spending is concentrated and have the infrastructure to act on it before reconciliation surfaces the damage. 

Here are the major ACO Cost Drivers where most of that spending originates, and what controlling it actually requires.

Preventable Hospitalizations and Readmissions

Avoidable inpatient admissions sit at the top of the cost list for most attributed populations. Chronic disease patients who slip through without follow-up, medication checks, or any clinical touchpoint between visits tend to end up back in the hospital. Each readmission chips away at shared savings that took the rest of the year to build.

Getting ahead of this requires visibility before the admission, not after. ADT feeds, lab trends, and pharmacy fill data need to reach a risk model that puts the right patients in front of a care manager, while a phone call can still change the outcome. Once a patient is back in the ED, the cost has already happened.

The 7-day and 30-day post-discharge windows carry the highest readmission risk. ACOs that track those windows actively and follow up consistently see lower rates. Those that don't, don't.

Care Management Program Efficiency

Care management costs, including coordinators, patient education, and high-risk monitoring, represent ongoing operational expenses that need to generate measurable savings to justify.

Running the same care management intensity across every attributed patient burns coordinator time on patients who don't need it, and leaves high-risk patients with less attention than their clinical situation warrants. Sorting patients accurately by risk level is what makes the math work: high-risk patients get active management, rising-risk patients get monitoring and outreach, and stable patients stay on routine preventive schedules.

Health IT Infrastructure as a Cost Driver

ACOs running on disconnected systems don't find out where their cost problems are until claims settle, which is weeks or months after any practical window to respond. Manual reconciliation slows everything down: risk identification, leakage monitoring, and utilization tracking all lag behind the actual clinical picture. By the time the data is clean enough to act on, the performance period has moved on.

A platform that pulls from EHRs, claims, labs, pharmacy, and ADT feeds gives ACOs the visibility to manage ACO Cost Drivers before they show up at year-end reconciliation. For most ACOs, particularly those managing fewer than 50,000 covered lives, an established population health platform delivers a better return than attempting to piece together custom systems.

Provider Alignment and Compensation Models

Provider compensation models that reward volume give physicians no practical reason to reduce unnecessary referrals, limit high-cost imaging, or coordinate post-discharge care closely. Physicians working under traditional fee-for-service arrangements are financially indifferent to the cost outcomes the ACO is responsible for.

ACOs that connect physician compensation to quality performance, utilization targets, and shared savings results give their networks a reason to work differently. That alignment takes time to build, but without it, clinical programs the ACO invests in will always compete against incentives pulling in the opposite direction.

Getting Control of What's Driving Cost

Managing ACO Cost Drivers isn't a one-time project. It requires continuous data, connected workflows, and the ability to track utilization, risk, and quality trends across the full attributed population in real time.

Persivia solution gives ACOs the infrastructure to do exactly that. It aggregates data from over 70 EHR and practice management systems, runs AI-driven risk stratification that updates as new data arrives, monitors post-acute utilization and leakage across every connected care setting, and surfaces HCC coding gaps at the point of care. For ACOs managing complex Medicare populations under tight benchmarks, that level of visibility is what turns cost driver awareness into actual shared savings performance.

5 Ways Digital Health Platforms Revolutionize Patient Care

Healthcare delivery has always depended on how well information moves between people. A physician who doesn't know about a patient's recent hospitalization, a care manager working from a two-week-old risk score, a coordinator manually tracking medication adherence across hundreds of patients: these are not rare scenarios. They are the daily reality for most care teams. A digital health platform addresses this at the operational level. Data connects, workflows run without manual handoffs, and care teams have the clinical context to act before a situation worsens. Here's where that plays out in practice.

1. Complete Patient Records Across Every Care Setting

Fragmented records are where care coordination breaks down first. A patient seen at three different facilities in one month leaves records in three separate systems with no automatic way to reconcile them. Digital health platforms pull from EHRs, claims, labs, pharmacy, and ADT feeds, so the care team works from one record instead of chasing information across systems. The patient's history is current, complete, and in one place.

This enables practically:

• Accurate chronic condition tracking regardless of where care was received
• Medication reconciliation that reflects all prescribers and dispensing history
• Social risk factors visible alongside clinical data during care planning

2. Risk Identification Before Conditions Escalate

Identifying a patient as high-risk after they've been admitted is too late. The clinical and financial costs have already accumulated.

A digital health platform runs risk stratification against live data as it comes in. When lab trends shift, prescription fills stop, or an ADT notification arrives from an outside facility, the patient's risk profile updates, and care teams are alerted. Rising-risk patients get flagged while intervention is still practical.

This matters most for patients managing multiple chronic conditions, where single-condition risk models miss the combined clinical picture entirely.

3. Care Gap Closure That Runs on a Schedule

Care gap programs managed through periodic outreach lists miss patients between cycles. A digital health platform tracks gap status as data arrives and feeds overdue screenings, follow-ups, and preventive services into coordinator workflows as they come due.

The result is systematic rather than opportunistic gap closure:

• Diabetic patients get A1c outreach before the measurement period closes
• Post-discharge follow-up appointments get scheduled before the 7-day window expires
• Annual wellness visits get flagged before the calendar year runs out

For organizations managing HEDIS, Stars, and value-based contract performance, this consistency is what separates predictable measure results from year-end surprises.

4. Quality Reporting That Reflects Current Performance

Most quality reporting has run as a retrospective exercise. Data gets pulled, measures get calculated, and organizations find out how they performed after the period has closed.

Digital health platforms track and measure performance against live data throughout the year. HEDIS numerators update as qualifying events are documented. HCC coding gaps surface at the point of care. Stars measure rates that stay visible to quality teams during the performance period, not after.

That timing changes how quality programs operate. Teams redirect outreach toward lagging measures in the same period rather than filing gaps away for next year's planning cycle.

5. Care Management Workflows That Connect to Clinical Action

When a care manager's risk data lives in one system, the care plan in another, and tasks in a third, time goes into navigation rather than patient care. Digital health platforms connect those layers so a risk flag leads to an assigned task, care plans draw from existing patient data rather than starting blank, and documentation happens within the same workflow rather than as a separate step afterward.

What Connected Workflows Change Day-to-Day

• High-risk flags route to care manager queues without manual triage
• Care plan drafts pull from active diagnoses, open gaps, and clinical pathways
• Encounter documentation updates care plan progress in real time
• Patient outreach schedules are generated from gap data rather than manual review

Care managers taking on larger caseloads without additional staff isn't about working faster. It comes down to how much of the administrative and analytical work the platform handles rather than the coordinator.

Takeaway 

The five areas above aren't separate features that happen to coexist. They work because the data underneath them is unified, and the workflows connect. When that foundation is in place, reporting reflects what's happening now, care teams act on current information, and patient outcomes follow from that.

Persivia's CareSpace® Digital Health Platform operates across population health management, care management, clinical quality, advanced analytics, and value-based care contracting in one environment. It connects with over 3,000 data sources, manages over 160 million patient records, and supports organizations across Medicare, Medicaid, and commercial populations. The CareSpace® gives care teams the data, workflows, and reporting they need to manage complex populations without stitching together separate point solutions to do it.