Understanding the medical status of a given population and estimating the evolution in their health standards over a particular period can be a cumbersome task. Predicting the changes in medical health is not easy and here comes the role of risk adjustment models. Efficient risk management is critical for the service providers. In the current times, most healthcare organizations do the patient risk assessment by referring to the medical history including health records to understand the medical condition of related members in the given population. But this doesn’t suffice to properly understand the health of the patient and provide an appropriate treatment. An appropriate capture of the risk calls for a futuristic approach for a prospective view of patient conditions and treatments.

Understanding The Current Functionality Of Risk-Adjustment

Under the current scenario, healthcare organizations are paid for the results of the treatment they offer to the patients irrespective of the number of services they provide. Hence, they are required to maintain an appropriate record of the health of their patient population to get accurate funding for their medical services. This has a great impact on government-sponsored programs that include Medical Advantage, Medicaid Plans, and other commercial exchange programs. With an increase in the sick population, the insurers and service providers need more funds to manage the medical condition of the patients.

The providers have spent a significant amount of time gaining knowledge and improvising new techniques to elevate their coding practices for Current Procedural Terminology codes under fee-for-service payment models since these codes have a direct impact on reimbursements. Codes have become critical to measure the population’s risk. Any error in coding can lead to inappropriate recording of a patient’s medical condition and can mess up the claims for funds.

How Can Retrospective Risk Adjustment Be Challenging?

In recent times, Medicare Advantage and commercial plans have been operated on the basis of retrospective risk adjustment. Though this method is greatly practiced, it comes with a fair share of challenges. Let’s discuss these challenges in detail –

  1. Not Having A Concrete Measure Of Health Condition – Due to a delay in the analysis of a patient’s health condition, there is a lack of a fair idea of the risk involved. When analysis happens months after the doctor’s appointment, it doesn’t provide an actual picture. This implies that insurer plans and providers don’t have accurate information on the current level of sickness in the population.
  2. Operationally Cumbersome Procedure – Retrospective reviews can be a difficult task to perform. The vendors are paid by the plans to chase the charts. Medicare Advantage plans and providers hire coding professionals to perform the statistics and coding functionalities which can be an expensive procedure and time intensive. Besides, there can be human errors while performing the calculations leading to inaccurate records.
  3. Leading To Provider Abrasion – The process of documentation and consistently maintaining the patient health records is quite challenging for the service providers. Due to these processes, they can’t focus on providing proper care to the patient.

Prospective Approach – The Future Of Risk Adjustment

A prospective approach to risk management can be a little more tricky than a retrospective one but it serves accurate results. The clinicians have early access to data due to prospective assessments taking place closer to the point of care. This way the providers can provide timely information about diagnostics, monitoring of the patient, and treatment plans. It offers an intelligent interface that aids in improving clinical documentation and coding process before further submission for claims. The outcome of this is an accurate disbursement of funds.

The plans and providers gain a mutual benefit from the prospective approach of risk assessment due to a seamless administration. By doing an integrated suspecting, timely follow-up with the patients, and deploying enhanced methods of coding into the existing workflow, there can be a significant improvement in the accuracy of coding and documentation. The operational costs become reduced and there is a timely preparation of risk-assessment reports.

The Advantages Of Building A Modernized Risk-Adjustment System

Developing an advanced risk assessment system while complying with the regulatory framework requires short-term and long-term actions. The short-term actions can be deployed within a period of 2 to 3 years. Following are a few short-term actions –

  • Working towards a refined coding for Medicare Advantage to scrutinize the factor adjustment.
  • Building a concrete foundation for risk-management processes that does more than administrative claims from traditional beneficiaries.
  • The usage of the risk adjusters improves the capturing of social factors.
  • Inculcating the methods for advanced care management in traditional Medicare.

Next in line is the potential long-term actions. Let’s learn about them –

  • Doing an alignment for incentives and models for risk adjustment.
  • Establishing a link between risk assessment and health management of the population by using advanced integrated systems that aid in adjusting payments for risk and quality of care.
  • Deploying the use of a strategy based on evidence to improve the equity for risk adjustment.


Implementing advanced methods that offer a futuristic approach to risk assessment has become crucial to improve health care management. The Centers for Medicare and Medicaid Services (CMS) is responsible for framing the guidelines to be followed while performing risk adjustment coding to get an accurate calculation of funds to be disbursed to the medical service providers. Having an empowered and latest risk-assessment interface needs to be prioritized to improve the capture of accurate data.

By Chris Bates