Risk Adjustment Model

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Risk adjustment models are used throughout the healthcare industry as a tool to help predict and subsidize health care costs. This is usually based on the comparative risk of the applicants in order to protect against potential failures of adverse selections. Essentially, the purpose of risk adjustment is to eliminate the ability for inadequate influences upon risk selection. However, it is important to understand that there are several substantial differences between the Health and Human Services Hierarchical Condition Categories (HHS-HCC) commercial risk adjustment model and the Centers for Medicare & Medicaid Services Hierarchical Condition Categories (CMS-HCC) model used in Medicare Advantage plans. Risk adjustment is an important part
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