I believe they look at the competitiveness of schools to balance out class rank (not GPA). I wouldn't call it hurting you, it is simply making sure someone doesn't lose credit just because their class rank is lower but their school is more competitive.
Basically it's like seeing an A+ in Calculus or an B+ in AP Calculus. Although one is a higher grade they will also taken into account it was a more challenging class but it doesn't neccessarily mean it will hurt you. Just make sure you take advanced classes.