The Importance of Risk Adjustment Coding

Date: 11/13/17

Risk adjustment is critical to ensuring that all Superior members receive quality and affordable health care. To help ensure Superior members with chronic conditions like diabetes (relatively low but regular costs) or cystic fibrosis (very high and regular costs) are treated, risk management was introduced to balance risk profiles. 

The Risk Adjustment Program is a provision of the Affordable Care Act (ACA) that transfers funds from insurers with lower than average risk, to insurers with higher than average risk within a given state. This is done in order to adjust premiums for adverse selection among carriers caused by membership shifts due to guaranteed issue and premium rating mandates, creating a so-called “zero-sum game.” The transfer payment mechanism is designed to allow a health insurer to price and offer individual products without consideration of underlying relative health status of individuals to be enrolled. This means, higher risk scores equal higher budgeted funding towards health-care services for your patients.

Providers can assist in balancing risk profiles by accurately documenting and coding for risk adjustment. If conditions are not documented correctly, they may go untreated. This is just one of the important reasons that thorough and accurate risk adjustment coding is critical to patient care.

To ensure appropriate steps for accurate risk adjustment coding are being used within your practice, please download the Top Ten Tips for Risk Adjustment Documentation and Coding.