What is risk adjustment factor in health care?
As defined by the Centers for Medicare and Medicaid Services (CMS), risk adjustment predicts the future health care expenditures of individuals based on diagnoses and demographics. Risk adjustment modifies payments to all insurers based on an expectation of what the patient’s care will cost.
What is risk adjustment factor?
A RAF score, or risk adjustment factor score, is a medical risk adjustment model used by the Centers for Medicare & Medicaid Services (CMS) and insurance companies to represent a patient’s health status. RAF scores are used to predict the cost for a healthcare organization to care for a patient.
What does risk adjusted mean in healthcare?
Risk adjustment is a methodology that equates the health status of a person to a number, called a risk score, to predict healthcare costs. The “risk” to a health plan insuring members with expected high healthcare use is “adjusted” by also insuring members with anticipated lower healthcare costs.
What is risk adjustment and why is it important?
Risk adjustment is a program designed to stabilize insurance markets by compensating plans based on the expected health- care costs of their members, taking into account the level of illness in that population.
What are the 3 main risk adjustment models?
The HHS risk adjustment methodology consists of concurrent risk adjustment models, one for each combination of metal level (platinum, gold, silver, bronze, and catastrophic) and age group (adult, child, infant). This document provides the detailed information needed to calculate risk scores given individual diagnoses.
Why is risk adjustment important in healthcare?
In its simplest terms, risk adjustment ensures that the health conditions, health status, and demographics of the beneficiaries in a Medicare Advantage or an Affordable Care Act plan are accurately documented—and that the health plans managing those beneficiaries are adequately compensated for that management.
What is the difference between RAF and HCC?
HCC codes are additive, and some have multipliers. Population complexity/severity affects payment in many Medicare contracts. RAF is used for benchmarking for quality and safety. RAF enables identification and stratification for patient management.
What is the difference between CMS HCC and HHS HCC?
Type of Spending—The CMS-HCCs are configured to predict non-drug medical spending. The HHS-HCCs predict the sum of medical and drug spending. Also, the CMS-HCCs predict Medicare provider payments while the HHS-HCCs predict commercial insurance payments.