CMS Risk-Adjustment Factor: What is it?

TheCentersforMedicareandMedicaidServices(CMS)usesrisk-adjustment factorstocomputethepaymentforthebeneficiariesenrolledinMedicareor MedicareAdvantageplans.Indoingso,CMScanmakeaccuratepaymentsfor enrolleeswithdifferencesinexpectedcosts.Lastly,theriskadjustmentallows CMStousestandardizedbidsasbasepaymentstoplans.

CMSriskadjustscertainplanpayments,suchasPartCpaymentsmadeto:

• MedicareAdvantage(MA)plans

• ProgramforAll-InclusiveCarefortheElderly(PACE)organizations

• PartDpaymentsmadetoPartDsponsors

• MedicareAdvantage-PrescriptionDrugplans(MA-PDs)

• StandalonePrescriptionDrugPlans(PDPs)

MedicareAdvantageplansreceivepaymentforeachcoveredmemberfrom theCentersforMedicareandMedicaidServices(CMS).Riskadjustment changesplanpaymentstoensureaccurateandadequatecompensationfor providingservicesandcoveringbenefits.Paymentisdeterminedbya

member’sriskscore,whichisbasedonamember’spredictedhealthstatus anddemographiccharacteristics.

MedicareRACMSHierarchicalConditioncategory(HCC)modelisusedto risk-adjustpayment.

Thehigh-levelchecklistbelowofplanrequirementsdetailsinformationabout risk-adjustmentdatacollection,submission,reporting,andvalidation:

• Ensuretheaccuracyandintegrityofrisk-adjustmentdatasubmittedto CMS.Alldiagnosiscodessubmittedmustbedocumentedinthemedical recordandtheresultofanin-personvisit.

• Implementprocedurestoensurediagnosesarefromacceptabledata sources.Theonlyacceptabledatasourcesare:

o Hospitalinpatientfacilities

o Hospitaloutpatientfacilities

o Physicians

• Submittherequireddataelementsfromacceptabledatasourcesand accordingtocodingguidelines.

• Submitallrequireddiagnosiscodesforeachbeneficiaryandsubmit uniquediagnosesonceduringtherisk-adjustmentdatareporting

period.Submittersmustfilterdiagnosisdatatoeliminatethe submissionofduplicatediagnosisclutters.

• Theplansponsordeterminesifanydiagnosiscodeshavebeen erroneouslysubmitted,andtheplansponsorisresponsiblefordeleting thesubmitteddiagnosiscodesassoonaspossible.

• ReceiveandreconcileCMSrisk-adjustmentreportspromptly.Plan sponsorsmusttracktheirsubmissionanddeletionofdiagnosiscodes continuously.

• OnceCMScalculatesthefinalriskscoresforapaymentyear,plan sponsorscanonlyrequestarecalculationofpaymentupondiscovering thesubmissionoferroneousdiagnosiscodesthatCMSusedtocalculate afinalriskscoreforapreviouspaymentyearifithadamaterialimpact onthefinalpayment.PlansponsorsmustinformCMSimmediately uponsuchafinding.

Importance of RAF Score

Hierarchicalconditioncategorycodinghelpscommunicatepatientcomplexity andportrayapictureofthewholepatient.Inadditiontohelpingpredict healthcareresourceutilization,RAFscoresareusedtorisk-adjustqualityand costmetrics.Byaccountingfordifferencesinpatientcomplexity,qualityand costperformancecanbemoreappropriatelymeasured.Italsohelpsto improvethequalityofpatientcare.Forexample,higherscorescantriggerthe referralofapatientforcasemanagementinanaccountablecareorganization (ACO)orhelptoidentifycandidatesforchroniccaremanagementservices.

Source of content: AGSHealth Blog - CMS Risk-Adjustment Factor