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Tuesday, September 25, 2012

Risk Adjustment

By Michael Simpson


Risk adjustment plays a very large role within the health care industry, and especially in connection to how the Centers for Medicare and Medicaid Services allocate funds for plan members. Risk adjustment is centered around the need to determine how much a health plan member is going to cost in terms of services and treatments needed and rendered. It is through risk adjustment that providers are compensated by CMS as well as how much the plan enrollee will have to pay. As the importance of risk adjustment continues to grow and be highlighted by the health care industry providers, the number of types of risk adjustment approaches continues to grow.

Risk adjustment works by looking at the diagnostic codes provided on a patients, or plan enrollee's charts and information and determining how much that specific health issue will likely cost in terms of treatment and services needed. Each diagnostic code is linked to a monetary value of the cost of managing that health issue. The more codes an individual has, the more money will be allotted to cover the common treatments and services needed to managed that issue. When codes are not properly written or recorded, that individual may be given less funding than necessary. This is why it is so essential for health care providers to keep detailed records of patient interactions and encounters so that the information can be properly coded in terms of the Hierarchical Condition Categories set by the Centers for Medicare and Medicaid Services,

Each individual member who is enrolled in a Medicare advantage plan has a risk adjustment performed each year to determine the anticipated cost of that individual over a years' time in terms of the cost of health care services and treatment provided. Correctly calculated risk adjustment numbers are essential to properly budgeting and minimizing unnecessary costs as well as providing plan members with the necessary and needed treatment services.

Retrospective risk adjustment includes a number of different aspects to ensure the proper calculation of a patients likely yearly health care costs. This type of risk adjustment looks to examine the past charts as well as medical records in order to find potential missing diagnostic codes, or incorrect coding. This task can be outsourced to health care businesses who specialize in retrospective risk adjustment for those under the Medicare Advantage plan.

To learn more go to Altegra Health.




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