What is Medicare Risk Adjustment?

Medicare Risk Adjustment is a process used by the Centers for Medicare & Medicaid Services (CMS) to adjust payments to Medicare Advantage plans based on the health status and demographic characteristics of their enrolled beneficiaries. The goal is to ensure that plans receive appropriate compensation for taking care of members with varying levels of health risk. This system uses diagnosis codes and other data to predict future healthcare costs, encouraging plans to provide comprehensive care and accurately document patient conditions.