Business

Risk Stratification

KaiCare Ai can deliver Risk Stratification to accurately predict expected health care costs, so our clients can compete for beneficiaries based on price and quality, not health status. An accurate risk adjustment model ensures that payments to Medicare Advantage plans adequately compensate for the costs of treating and managing both high- and low-cost individuals.

Risk Stratification affects plan payment in three important ways: First, Medicare Advantage plans bid against FFS Medicare county benchmarks to determine payment. CMS adjusts benchmarks based on the average FFS Medicare risk score in the county. These adjusted benchmarks represent the maximum amount CMS will pay to an individual plan. Second, CMS uses the difference between the county benchmarks (described above) and the plan's bid to determine the level of rebates, which are used by plans to provide additional benefits to beneficiaries. Third, after a benchmark is set, CMS adjusts the payments to health plans on an individual level based on the risk score.

Recommendations

1. 1Ensure a predictable and stable risk adjustment model
2. 2Maintain coding intensity adjustment at the statutory minimum level
3. 3Improve risk model accuracy for individuals with multiple chronic conditions
4. 4Incorporate social determinants of health into the risk model
5. 5Validate the Encounter Data System
6. 6Implement the Encounter Data System at a slow and measured pace
7. 7Consider impact of the Encounter Data System on the coding intensity adjustment
8. 8Guarantee a transparent process when modifying the risk adjustment model