Medicare Risk Adjustment
Document diagnoses correctly to receive accurate payments
HPSM encourages physician providers to document patient health information accurately for appropriate Medicare reimbursement.
The Centers for Medicare and Medicaid Services (CMS) uses risk adjustment diagnosis codes and demographic data reported for one year
to determine payment for the next year. Calculations for payment are based on patient risk scores. For more information about CMS risk adjustment, view our FAQs.
Tools for Physicians and Office Staff
Annual Assessment Brochure
Quick Coding Aid
Comprehensive Coding Aid
Diabetes and Renal Failure Coding Tip Sheet
To obtain laminated copies of the tools and tip sheets,
contact Patrick.fitzgerald@hpsm.org or 650-616-2807.
Document at every clinical encounter to build patient risk score
Patient risk scores are used to calculate payment. Diagnosis and demographic data captured at all clinical
encounters is used to produce a health-based measure of future medical need. This is called the HCC (Hierarchical
Condition Categories) model and was created to pay more accurately for predicted health expenditures.
To learn more, view Medicare Risk Adjustment 101.
For questions contact
Patrick.fitzgerald@hpsm.org or 650-616-2807.
Risk Adjustment FAQs
What is risk adjustment and why is it important?
Risk adjustment is a process that CMS uses to level the playing field regarding the reporting of patient
outcomes and Medicare reimbursement based upon patient health status. It enables health plans to be paid
appropriately based upon members’ overall health.
How does risk adjustment work?
Patient health risks are adjusted using a number of variables, including age, gender, previous health
history, and the presence of chronic conditions. This formula yields a member risk score, which is used
in calculating payment to a health plan.
Why is documentation and coding so important?
Risk scores are based on acute, chronic, and status conditions documented in each member’s chart.
Remember: if it’s not documented, it didn’t happen.
How can I ensure that my documentation is correct?
Ensure your patient charts are thorough by documenting all acute, chronic, and status conditions every year.
You should also note specific rather than general conditions (e.g., major depression rather than depression)
if applicable.
What are the common problems with documentation that I should watch out for?
The most common problem with documentation is that it is not thorough. Every encounter with a patient is an
opportunity to assess health and comprehensively document chronic conditions, co-existing acute conditions,
active status conditions, and pertinent past conditions.
What are common health issues that may be overlooked?
The following conditions are frequently not documented or documented incorrectly:
- Major depression (rather than depression)
- Old myocardial infarction (old MI)
- Renal failure
- Diabetes with complications
- Angina pectoris
- Breast, prostate, colorectal cancers coded as “history of” rather than active
- Protein calorie malnutrition
- Amputation status
- Drug or alcohol dependency
- Tracheostomy status or respirator dependence.
Helpful Links
Industry Collaborative Effort (ICE) offers a library that includes tools and
physician trainings ICE for Health Homepage