Acute Hospital Care at Home: CMS Signals a Shift in Risk Adjustment and Payment Models 

By Leah Jeffries, Director, Audits & Assessments, UASI 

Hospital-at-Home, CMS Evidence, and a Quiet Signal on Risk Capture

In April 2026, CMS issued a Federal Register notice seeking public comment on the continued information collection requirements for the Acute Hospital Care at Home (AHCAH) program. While technical on its surface, the notice is strategically significant. It follows CMS’s completion of the first congressionally required national evaluation of hospital-at-home outcomes and signals a broader shift in how Medicare uses clinical and diagnostic data, not only to finance care through Medicare Advantage, but also to evaluate, compare, and ultimately design alternative payment models across fee-for-service programs. 

Historically, Risk Adjustment Factor (RAF) scores and Hierarchical Condition Category (HCC) coding have been viewed primarily as a Medicare Advantage construct, used to prospectively translate population complexity into capitated payments for MA plans. Increasingly, however, CMS is leveraging those same risk adjustment mechanisms as analytic infrastructure to assess care delivery models, normalize patient complexity, and anchor episode-based and site-neutral payment strategies. Medicare is no longer using RAF data solely to pay plans. It is also using it to determine which care models demonstrate value, which scale, and which may ultimately become mandatory. 

This shift is already visible in CMS’s broader policy direction, including the initiation of the TEAM, or Transforming Episode Accountability Model, an alternative payment model that explicitly relies on accurate documentation and diagnosis capture to align episode spending targets, benchmark provider performance, and assess financial risk. In this context, coding accuracy and documentation integrity are no longer secondary compliance functions. They are foundational inputs into how CMS evaluates value and structures payment across the healthcare system. 

CMS Findings on Acute Hospital Care at Home Outcomes 

In September 2024, CMS released its final evaluation of the AHCAH program, analyzing more than 13,000 hospital-at-home inpatient episodes compared with nearly 1 million traditional inpatient stays across 332 participating hospitals. For appropriately selected patients, CMS identified strong performance signals, including lower 30-day mortality across major diagnosis groups, meaningfully reduced post-discharge Medicare spending, lower utilization of intensive hospital services, positive patient, caregiver, and clinician experiences. 

Patient Complexity and Risk Adjustment Factor Scores in Fee-for-Service Medicare 

At the same time, CMS was explicit that AHCAH patients differed materially from the broader inpatient population. Patients treated at home were, on average, less clinically complex based on mean and median RAF scores, less likely to be dual eligible for Medicaid, and more likely to reside in stable urban environments. These differences were not treated as limitations of the study. They were central to how CMS interpreted the results. 

How CMS Uses HCC Coding to Evaluate Care Delivery Models 

Notably, CMS relied heavily on HCC-derived risk scores to compare populations, contextualize mortality and utilization differences, and interpret spending outcomes. This is significant because AHCAH operates under Medicare fee-for-service, not Medicare Advantage. In this evaluation, the HCC code captured functioned not merely as a payment mechanism but as a core policy, statistical criteria, and analytic tool. 

What This Means for Medicare Fee-for-Service Payment Models 

From an industry perspective, AHCAH represents more than an alternative site of care. It is an early and visible example of how CMS is integrating risk adjustment into fee-for-service evaluation and alternative payment model design. Coding and documentation practices that were once viewed primarily through a Medicare Advantage lens are increasingly central to how CMS assesses quality, safety, equity, and cost across new care models.

The Expanding Role of Risk Adjustment Across Medicare Programs 

This marks a meaningful shift. Diagnosis accuracy is no longer confined to MA revenue optimization. It is becoming a prerequisite for participation in episode-based models, mandatory payment programs, and capacity relief strategies. Hospital-at-home may serve as a compelling case study today, but its implications extend broadly across the Medicare landscape. 

From our perspective, this evolution highlights a critical reality. As CMS continues to test and scale alternative payment models, the integrity of clinical documentation and code capture will directly influence not only reimbursement but also the evaluation, sustainability, and regulation of alternative care models. AHCAH may represent the beginning of this shift, but it is unlikely to be the end. 



Leah Jeffries, RHIT, CDIP, CCS, CCS-P 

Director, Audits and Assessments

Additional Resources

MedPAC (Medicare Payment Advisory Commission). (2023). Report to the Congress: Medicare Payment Policy (risk adjustment and Medicare payment systems). Available at: medpac.gov/document/march-2023-report-to-the-congress-medicare-payment-policy

Office of the Federal Register. (2023). Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. Available at: federalregister.gov/documents/2023/11/01/2023-24283/safe-secure-and-trustworthy-development-and-use-of-artificial-intelligence