How it works | Notion

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What is Risk Adjustment?

Managed care organizations (such as MA, ACA plans, or ACOs) use a statistical process to predict healthcare costs.
Health risk scores for members are calculated using inpatient, outpatient, and professional claims data.
CFOs are responsible for ensuring that their organization is adequately compensated for its clinical burden.
An individual's risk score can be used to forecast their cost of care, with higher scores indicating higher costs.
Actuarial risk is determined based on the risk scores of the member population, with higher scores resulting in more revenue.

Claims are generated based on medical records documented by providers such as hospitals and physicians.
Claims must include diagnosis ICD codes, service bill type codes, and service CPT/HCPCS codes.
The payor submits member enrollment and claims data to CMS.
CMS produces a Monthly Membership Report (MMR) and a Model Output Report (MOR).
CMS makes payments to the payor, who then pays the providers.