Risk adjustment is a method to offset the cost of providing health insurance for individuals—such as those with chronic health conditions—who represent a relatively high risk to insurers. Under risk adjustment, an insurer who enrolls a greater-than-average number of high-risk individuals receives compensation to make up for extra costs associated with those enrollees.
The Risk Adjustment (RA) model uses a patient’s demographics and diagnoses to determine a risk score, which is a relative measure of how costly that patient is anticipated to be. Healthy patients have a below-average Risk Adjustment Factor (RAF) score so revenue from the insurance premium is transferred from healthy patients to patients with an above-average RAF score.
Under this payment model, two patients in the same practice can have a different payment rate. This is based on a variety of factors that determine the amount of risk/work involved to maintain the health of a patient.
Risk adjustment is a hot topic and medical coders should know more about it.
You can learn more about this topic by attending a free webinar on 2nd August 2018. You will earn FREE AAPC CEU as well after attending the webinar. Just click the below link for webinar registration.
