Risk Adjustment Program: What You Need To Know

Risk adjustment is a key element of both Medicare Advantage (MA) and the Affordable Care Act (ACA). It ensures that health plan payments accurately reflect the health status and risk profiles of the individuals enrolled in their plans.

MA and ACA health plans are paid a set premium by the Centers for Medicare & Medicaid Services (CMS) per member to cover the costs of health care services provided to that member. This amount does not vary based on actual services provided, rather it is based on demographic and disease data specific to that member. Using this data to adjust premium payments to health plans is referred to as risk adjustment.

Effective risk adjustment depends on thorough, in-person health assessments. These evaluations lead to accurate documentation in medical records and precise diagnosis coding. The diagnosis codes are submitted through claims to the health plan and used to assess the patient’s risk level.

McLaren’s risk adjustment programs support our commitment to maintaining high-quality care through strong physician-patient relationships. These programs help identify opportunities for improved diagnosis coding and care, enabling earlier detection,  prevention of conditions, as well as participants for disease management programs and other programs available through the health plan. They also encourage members to stay current with health screenings, tests and vaccines. 

Risk Adjustment Guidelines Documentation Guidelines & Tips Resources

Risk Adjustment Guidelines

✔ Document All Relevant Health Conditions

  • Include all conditions discussed during the encounter, especially those that co-exist at the time of the visit.
  • If the condition is discussed, ensure that the diagnosis is properly documented in the assessment/treatment plan of the medical record.
  • Each medical condition addressed during the encounter should include a statement indicating the impact on patient care, treatment, and/or management: At a minimum, include a brief statement that updates the status of each diagnosis.

✘ Don’t Code Solely from the Problem List or Past Medical History

  • Only code conditions actively addressed in the visit with proper clinical support in the documentation

✔ Ensure Medical Record Completeness

  • Each record must include:
    • Date of service
    • Patient’s full name
    • Additional identifiers (e.g., date of birth or chart number)
    • Provider name, signature, and credentials
  • Records must be legible.

✔ Link Diagnoses to Medication

  • For every prescribed medication, clearly document the diagnosis or condition it is treating.

✔ Diagnoses Must Be Captured Annually

  • Since members’ Risk Adjustment Factor (RAF) scores reset each calendar year, all relevant diagnoses must be accurately documented at least once a year.
  • Recapture the Following Conditions Annually:
    • Chronic conditions that require ongoing treatment and monitoring (e.g., congestive heart failure (CHF), chronic obstructive pulmonary disease (COPD), diabetes mellitus (DM)) .
    • Active status conditions (e.g., amputations and ostomies).
    • Historic Conditions Requiring Ongoing Monitoring (e.g., conditions with potential for recurrence, such as cancers in remission or previous myocardial infarctions. 

Documentation Guidelines & Tips

  • Code to the Highest Level of Specificity
    • Use descriptive terms such as “chronic”, “acute” or “stable” to reflect the current status of each condition.
    • Clearly describe the clinical picture to ensure accurate and complete coding to reflect the current status of each condition.
  • Use “History of” and “Resolved” Appropriately
    • Only use “history of” or “resolved” when a condition is no longer active.
    • Do not use “history of” to describe chronic or currently managed conditions.

✔ Use: “Chronic, stable COPD”
✘ Avoid: “History of COPD” (if the condition is still present)
✔ Use: “Controlled Type 2 diabetes mellitus”
✘ Avoid: “History of type 2 diabetes mellitus” (if still active) 

  • Link Related Conditions Clearly
    • Use connecting terms such as “due to,” “caused by” or “related to” to document clinical relationships between diagnoses (e.g., “Chronic kidney disease due to hypertension).” 
  • Avoid Conflicting Documentation
    • Ensure that all parts of the medical record consistently reflect the patient’s current condition.
    • Contradictory statements can lead to denied claims or inaccurate risk scores. 

Resources