Implementing an effective risk adjustment strategy is important for health plans under the Affordable Care Act. Risk scores are used to determine adjusted capitated payments to plans based on the health status of their members. Risk scores are calculated using diagnosis codes from member encounters and can be positively or negatively affected by how well those codes capture members' health conditions. To maximize risk scores, plans should engage members in their health, provide coding education to providers, conduct chart reviews, and do targeted outreach to ensure all relevant diagnoses are reported for each member annually. This helps ensure accurate revenue for the plan while also improving members' health outcomes and engagement in their care.

1. Risk Adjustment Strategy
Implementing a
successful risk
adjustment strategy in
the age of the
Affordable Care Act

2. Risk
Adjustment
Strategy
• What is a risk score?
• Benefit from a good risk adjustment strategy
• How are Risk Scores determined?
• How is risk score data received?
• How Risk Scores can be negatively affected
• How to positively affect Risk Scores
Everyone has the potential to positively affect risk adjustment
scores while improving membership’s service utilization

3. What is a Risk
Score?
• Risk scores are a weighted payment adjustment
based on the composition and relative
healthiness of their beneficiaries
• Risk scoring is a statistical method of paying
managed care organizations /ACO’s different
capitated payments for member premium
• Risk scores are based on the number of
diagnosis codes reported for each member
within a specific time period

4. Who will
benefit from a
good risk
adjustment
strategy?
Benefit Areas Risk Adjustment Benefit
Members 1. Improved health
2. More engaged in their own care
3. Improved ability to make healthcare decisions
Finance
Departments
1. Accurate (correct) premium revenue based on
complete diagnostic data reported on time to the
appropriate agency (e.g. CMS and State DHS)
Quality & Medical
Management
1. Improved member engagement
2. Improved member outcomes
3. Improved HEDIS and STAR scores
Outreach Services 1. Population Health initiatives
2. Improved chronic condition identification and
management
Regulatory
Compliance
1. Improved data reporting for encounter data,
targeted programs (e.g. Child and Teen checkups)

5. How are Risk
Scores
determined?
• Encounter data (e.g. Diagnosis codes) are
reported to DHS (Medicaid) and CMS
(Medicare)
• Risk scores are not carried over from one
reporting experience period to another without
new encounter data
• Plan members need to be seen by a provider
and coded with all relevant diagnosis codes
• Any provider encounter can affect a risk score
(except pharmacy and Dental encounters)

6. Risk Score
Reporting
Process

7. How Risk
Scores can be
negatively
affected
• Omitting valid diagnostic codes on a claim will
reduce the member’s risk score
• Members who are not seen by a provider at
least once per year have no risk (or lose their)
score
• Members with chronic conditions who are seen
by a provider, but not for their chronic
conditions will have a reduced risk score
• Members who have multiple chronic conditions
but are not seen for all of their chronic
conditions during the year

8. How to
positively
affect Risk
Scores
• Consumer Engagement (e.g. Population Health)
• Provider coding education
• Chart review for services previously performed
• Verify that all valid diagnosis codes are on the
claim
• Targeted outreach efforts (e.g. non-utilizers)
• Targeted outreach to new members (e.g. histories)
• Members with a chronic condition who have not
been seen by a provider during the past year
• Continued efforts to have members see a provider
for the appropriate services on a regular basis

9. Questions?