Friday, October 26, 2012

What Is Medicaid Risk Adjustment?

By Susan McDonald

There are a number of people across the United States who is currently taking advantage of the Medicare Advantage plans offered through the Centers for Medicare and Medicaid services. In order to properly determine the number and quantity of payments to be given to the beneficiaries of these plans, the Centers for Medicare and Medicaid have developed the Medicare risk adjustment model.

Through this model the financial risk factor of each member is determined by looking at factors such as client history, diagnostic data as well as age and current health status. The risk factor of each plan member is the number, or cost, that they are likely to incur over the time span of one year. Risk adjustment is often used in the health insurance field and has been used by the Centers of Medicare and Medicaid services for numerous years and is persistently being developed and bettered.

Since the foremost portion of Medicare risk adjustment is calculated based on claims reporting it puts a big significance on precise and careful reporting between the health care suppliers to the health insurance plan. When it comes to reporting client health care and claims information, there are a number of areas that can be cause for calculation mistakes causing improper risk adjustment. Much of the mistakes that have taken place are centered around the problems of recording client visits and activity as well as the sharing of information from supplier, health insurer and Medicare.

One of the common mistakes is that of applying or listing a limited number of diagnostic codes to clients. In some cases clients will be listed to have a certain number of diagnostic codes, when in fact there are numerous more codes that apply to their health and situation that haven't been listed.

Health care suppliers and private health insurance plans will need to pay closer attention to the recording of each client encounter and application of the necessary diagnostic codes. This is how they will ensure proper risk adjustment for each individual client.

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