By Josh Hetler, Executive Vice President, Business Intelligence, DataLink |

Before the COVID-19 pandemic, approximately 6 in 10 adults in the United States had a chronic condition—accounting for 7 of the 10 leading causes of death in the United States. Today, chronic disease prevention and care has become increasingly important, especially because chronic conditions can impact the severity of COVID-19.

As more healthcare organizations transition to value-based care to combat rising healthcare costs and focus on preventative care, Centers for Medicare and Medicaid Services (CMS) has ramped up its promotion of value-based programs to reduce overall costs and improve quality care for Medicare beneficiaries.

Payers, including Managed Service Organizations (MSOs) in value-based care arrangements and those transitioning from fee-for-service models, are looking for innovative ways to enhance quality improvement, care coordination and risk adjustment accuracy to help them manage costs, improve the overall health of members, and meet regulatory requirements.

Because older adults are disproportionally affected by chronic conditions–80% have at least one chronic condition, and nearly 70% of Medicare beneficiaries have two or more—the accurate identification and documentation of chronic conditions has become a key priority.

CMS uses Medicare Advantage’s (MA) risk-adjustment model, known as the CMS-Hierarchical Chronic Conditions (HCC) Risk Adjustment model, to determine payments for MA. Ideally, payers should partner with a risk-adjustment expert to ensure accuracy and close gaps in care to improve plan member outcomes and curb costs.

Spotlight on Risk Adjustment

Risk adjustment is a statistical process that encompasses the underlying health status and health spending of plan members in response to health care outcomes and costs. Within the CMS model, MA plans assign each beneficiary a risk score based on medical coding that reflects the beneficiary’s medical condition. MA plans are given higher payments for beneficiaries with higher risk scores than they are for beneficiaries with lower risk scores.

Lower than expected risk scores impact payments for MA plans due in part to how CMS calculates payment plans. This means plans would not receive payments equivalent to their expected costs in the upcoming year and deferred care from 2020 could mean higher healthcare costs for plans in 2021.

Therefore, MA plans should look for strategies to effectively enable providers to identify open care gaps for proactive gap closure and provide payer-agnostic data to inform clinical, quality and risk adjustment programs.

At the member level, the risk adjustment process is designed to increase the chance for a fair comparison of provider performance. Adjustments account for systematic differences within member populations, correcting for clinical, demographic, and socioeconomic factors to prevent incorrect estimates of performance scores from bias.


Risk adjustments are meant to increase the likelihood that selecting a clinician or facility based on performance results in improved outcomes for the population. CMS uses risk adjustment factors (RAF) to reimburse plans for the risk of their enrolled beneficiaries. As a result, CMS can accurately pay for enrollees by forecasting the costs of providing care based on their diagnoses.

Health care providers must reassess members’ diagnoses and chronic conditions every year, making the collection and reporting of accurate and comprehensive diagnoses essential. Correctly identifying active diagnosis informs treatment decisions throughout the system and ensures that adequate resources are available. HCCs are assigned a value that, when all of a member’s HCCs are added up, create the RAF score.


An effective and critical risk adjustment strategy includes the prioritization of chronic condition recapture each year. This ensures regular contact with clinicians to monitor and manage chronic conditions to improve quality of care. It also contributes to fair reimbursement for the cost of care for health plans that maintain MA, commercial or Medicaid product offerings.


Tracking HCC recapture is an important part of an effective risk adjustment program because it provides actionable population health metrics to uncover potential care gaps. If conditions related to Healthcare Effectiveness Data and Information Set (HEDIS®) and CMS’ Star ratings are treated and under-documented or under-treated, the benefits of tracking recapture—or failing to track them—become much more critical.


Risk adjustment must encompass social determinants of health (SDOH), which account for 80% of health outcomes. Determinants include insecurities around income, food housing and transportation—to name a few. But integrating SDOH and clinical data at the member level is challenging in terms of time and resources across strategy, technology, compliance, and governance functions.

Integrating this data, however, enables payers to better understand the impact of SDOH on quality ratings and the potential insurance risk, as well as how to optimize member engagement. Capturing SDOH data through claims makes it possible to close care gaps, accurately recapture HCCs, improve utilization management and ensure proper reimbursement.

Risk Adjustment and Cost Containment

Because a data-driven approach to risk adjustment can provide a comprehensive view of the member’s care journey, healthcare leaders should consider adopting a value-based care enablement solution that captures data from disparate sources, allowing 360-degree visibility into the member’s health status. Real-time insights help to align the payer, provider, and member with one solution that proactively closes care gaps to ensure a complete health status for improvements in care delivery and health outcomes.

Look for a solution that offers an analytics engine that prioritizes high-risk members with suspected conditions and provides the financial impacts of those suspected conditions. Intelligent analytics can break down member population through data visualization tools and reporting—and be pushed directly to the provider at the point of care.

The best solutions generate suspect lists to manage retrospective, concurrent and prospective clinical programs, support in-home evaluation results and impact reporting and RAF score prediction.

The most optimal solutions use connectivity with EHRs and bi-directional data feeds between disparate systems to extract continuity of care documents (CCD) data, allowing the provider to receive real-time data insights at the point of care.

The right value-based care enablement solution can reduce administrative burden, be used across the organization, and eliminate the use of multiple platforms. Some solutions offer at least 85% provider engagement rate and effectively improve workflows, documentation, collaboration, and member outcomes. This drives risk adjustment score accuracy.

With an accurate risk score, reimbursement can match the total cost of necessary care, enabling sufficient funding to improve quality of life for members and financial sustainability for organizations still struggling to overcome COVID-19 setbacks.

Headshot of Josh HetlerAbout the Author

Josh Hetler Customer-focused, healthcare technology leader with over 7 years of experience in building software products to improve the workflows for healthcare professionals in value-based arrangements. Josh onboarded two of the nation’s three largest Medicare Advantage health plans onto DataLink’s Evoke360 platform, which currently includes over ten thousand active users, managing over six million members. While at DataLink, he has held the positions of Account Manager, Director of Account Management, Director of Product and Software Development, Vice President of Product, and Vice President of Customer Success.

Before joining the DataLink team, Josh was a Territory Manager for MicroDose Sales and spent three years as a high school math teacher and basketball coach. He is a graduate of the University of Florida. Go Gators!


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