Accurate risk adjustment isn’t just a box to check; it’s now a strategic lever. Hierarchical Condition Category (HCC) coding underpins risk scores that drive Medicare Advantage and other value-based payments. With more than half of Medicare beneficiaries now enrolled in Medicare Advantage for 2025 (that equates to roughly 35.7 million people), precision in coding directly affects financial performance and compliance.

Many organizations with good intentions outsource HCC coding to third parties that promise scale and turnkey accuracy. But in practice, outsourcing can be costly, difficult, and risky. However, recent advances in generative AI have made it a lot easier and safer to bring HCC coding in-house, lowering costs, and strengthening audit readiness.

The hidden costs (and risks) of o

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