Health Affairs April 24, 2024
The Centers for Medicare and Medicaid Services Hierarchical Condition Category (CMS-HCC) Risk Adjustment Model is a methodology that scores the health status of a beneficiary with a number known as the Risk Adjustment Factor (RAF) to estimate expected health care costs for treating that patient. RAF impacts the compensation of risk bearers by adjusting the premium or benchmark to the level of expected health care expenditures of the underlying population. RAF currently requires that a diagnosis must be confirmed on a provider-submitted claim each year to “count” towards that patient’s score.
RAF was originally created to ensure Medicare Advantage (MA) plans were not structurally incentivized to avoid enrolling sicker Medicare members. However, MA plans have been under increased scrutiny for...
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