Proposed Risk Adjustment Changes

by  Wyn Staheli, Director of Research
June 4th, 2020

On June 2, 2020, HHS published two proposed changes to the Risk Adjustment Data Validation (RADV) protocols for HHS-Operated Risk Adjustment Programs:

1. The error rate calculation
2. The application of HHS-RADV results

Beginning with the 2019 benefit year, they are proposing to modify the error rate calculation by doing all of the following:

• Modifying the HCC grouping methodology used in the error rate calculation
• Refining the error rate calculation in cases where a healthcare issuer is only slightly outside of the confidence interval for one or more HCC groups
• Modifying the error rate calculation in cases where an outlier issuer has a negative error rate and also has a negative failure rate

They are also proposing a “transition from the current prospective application of HHS-RADV results to an approach that would apply HHS-RADV results to the benefit year being audited.” This would begin with the 2021 benefit year.

The deadline for comments on these proposals is July 2, 2020.

To review the details of these proposed changes, click here to review the Federal Register notice.