Medicare Education


Simple facts related to Medicare Risk Adjustment Factors (RAF) and the Hierarchical Condition Category (HCC) model

  • Enrollment in Medicare Advantage has increased from 11.1 million patients in 2010 to 14.4 million in 2013
  • 25 percent(25%)of all Medicare beneficiaries are enrolled in Advantage programs
  • In 2010 2/3 of all Medicare beneficiaries had multiple chronic conditions; 14% had six or more chronic conditions
  • The average base payment for each Medicare Advantage patient is $4,000.00
  • Correct documentation and coding aids in identifying patients who have a higher risk adjustment value and supports reimbursement to provide better care
  • A major portion of the capitated payment is based on the patient’s risk for future health care cost. This risk, the patient’s demographics, and sex establish a RAF score (Risk Adjustment Factor derived from the Hierarchical Condition Category (HCC) model).
  • Medicare Advantage plans rely entirely on the Hierarchical Condition Category for reimbursement.
  • Advantage plans must capture HCCs conditions annually. When documentation does not support the chronic condition(s), and no identification of HCCs has taken place, no reimbursement will be collected from Medicare.
  • If the chronic condition is not properly document and reported during the calendar year, the condition(s) will not be reimbursed and will be un- documented and treated without charge the following year.
  • Filing: You can “reach back” and file for reporting year 2013 until Jan. 2015 and recoup any RAF adjustments you are eligible for.