Label fusion is a critical step in many image segmentation frameworks (e.g., multi-atlas segmentation) as it provides a mechanism for generalizing a collection of labeled examples into a single estimate of the underlying segmentation. In the multi-label case, typical label fusion algorithms treat all labels equally – fully neglecting the known, yet complex, anatomical relationships exhibited in the data. To address this problem, we propose a generalized statistical fusion framework using hierarchical models of rater performance. Building on the seminal work in statistical fusion, we reformulate the traditional rater performance model from a multi-tiered hierarchical perspective. This new approach provides a natural framework for leveraging known anatomical relationships and accurately modeling the types of errors that raters (or atlases) make within a hierarchically consistent formulation. Herein, we describe several contributions. First, we derive a theoretical advancement to the statistical fusion framework that enables the simultaneous estimation of multiple (hierarchical) performance models within the statistical fusion context. Second, we demonstrate that the proposed hierarchical formulation is highly amenable to the state-of-the-art advancements that have been made to the statistical fusion framework. Lastly, in an empirical whole-brain segmentation task we demonstrate substantial qualitative and significant quantitative improvement in overall segmentation accuracy.