What is a “Medicare Risk Adjustment Factor (RAF)?”

Posted by:  :  Category: Medicare

The purpose for the Centers for Medicare and Medicaid Services (CMS) to conduct Risk Adjustment Factors is to pay plans for the risk of the beneficiaries they enroll, instead of calculating an average amount of Medicare/Medicare Advantage beneficiaries.  By doing so, CMS is able to make appropriate and accurate payments for enrollees with differences in expected costs. Lastly, the risk adjustment allows CMS to use standardized bids as base payments to plans.
Source: clinicservice.com

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