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Medicare Risk Adjustment Report

Provider Type

  • Physicians (does not apply to Cal MediConnect)
  • Participating Physician Groups (PPG)

The Centers for Medicare & Medicaid Services (CMS) requires Health Net to track Medicare Advantage (MA) claims separate from all other claims. For this reason, MA claims are separated from all other claims at the time of receipt. CMS determines MA plan payments based on a two-part calculation - a demographic formula plus a risk-adjustment formula. CMS uses encounter (including claims) data, reported to the health plan from providers, as a source of calculating the "risk adjustment" payment amount.

The risk adjustment formula uses demographic data (for example, age, sex, Medicaid status, or county of residence) and diagnostic data (for chronic conditions) to determine payment. More funds are paid for less healthy members. It also uses the current year's diagnostic data as the basis for next year's payments. Diagnosis of a condition must be reported at least every 12 months to continue payment at that rate. Complete, accurate and timely encounter claims/data reporting is key to receiving full payment from CMS.

Health Net and participating providers are required to submit a sample of medical records for the validation of risk adjustment data, as required by CMS. There may be penalties for submission of false data.

Last Updated: 10/30/2019