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Risk Adjustment

In keeping with the Medicare Modernization Act of 2003 and the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS) has implemented a risk-adjustment methodology for several CDPHP products. Risk coding is the comprehensive capturing of all diagnosis codes through best practice documentation and billing protocols. The purpose of this review is to identify and report all documented and appropriate diagnosis codes for your patients. 

CDPHP is obligated to submit all documented ICD-9-CM and ICD-10-CM codes for patients who are CDPHP members to CMS on an annual basis. This information enables us to get an accurate picture of our members’ health status and allows CMS to make appropriate and accurate payments. 

Risk Adjustment Defined:

  • Risk adjustment is a form of predictive modeling that assesses the relative risk that a member will incur medical expense above or below an overall average over a defined period of times.
  • Risk adjustment uses demographics and health status to adjust payments.
  • Diagnoses are collected and their specificity drives risk categorization
  • Sicker patients have higher risk scores and healthier patients have lower scores.
  • Accurate risk categorization identifies members for disease management interventions
  • Risk adjustment assists in the financial forecasting of future medical need

The Provider’s Role:

  • Accuracy and specificity in coding and medical documentation is critical for risk adjustment, specifically diagnosis coding.
  • Physicians are the main source of information for the risk adjustment model.
  • The risk adjustment model relies on ICD-9-CM and ICD-10-CM coding to represent the member’s health status, not just CPT procedure codes.

How CDPHP Can Help:

CDPHP offers complementary coding education materials for network providers. Please visit our provider portal for additional resources. These presentations will help providers to:

  • Achieve greater accuracy in documentation.
  • Identify and eliminate clinical documentation concerns that could pose a compliance risk for your medical practice.
  • Reduce the need for retrospective chart retrieval and review.

View the Risk Adjustment Frequently Asked Questions.