Risk Adjustment

What is Risk Adjustment?

Risk adjustment is an actuarial tool used to calibrate payment to health plans or other stakeholders based on the relative health of the at-risk population. Risk adjustment is used to adjust bidding and payment based on the health status and demographic characteristics of a member.  Risk scores measure members’ relative risk and risk scores are used to adjust payment for each member’s expected expenditures. 

Risk Adjustment Best Practice

  • See each member at least once each year and complete an Annual Wellness Assessment (face-to-face visit). Health Plans have their specific forms and typically pays provider to complete the comprehensive assessment.  Preferred IPA has a generic Annual Wellness Assessment form  
  • Evaluate and document all chronic conditions and historical amputation(s) in the medical record and code all diagnosis using ICD-10-CM codes and submit all diagnosis to Preferred IPA.
  • Coding: Providers need to link the chronic conditions to yield higher RAF scores in charts (linking conditions to medications and document manifestation of a condition: amputation due to poor control of diabetes).
  • Accurate Document
    • Condition Assessment: Stable, improved, tolerating meds, deteriorating, uncontrolled.
    • Example Conditions/Diseases: Chronic Kidney Disease, Cancer, Diabetes & associated manifestations, Hypertension, Chronic Obstructive Pulmonary Disease (COPD), Morbid Obesity, Major Depression, Cardiovascular Disease, etc.).
    • Care Plan: Monitor, D/C Meds, continue current meds, refuses treatment, refer to specialist.
    • Acceptable Source Data: IP, OP and Physician Office Visits (Face-to-Face)
    • Exclude Data Source: SNF, Hospice, Nursing Homes, Lab, Radiology, Ambulance, DME, Ambulatory Surgery Centers.
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