Common use of Purpose for Risk Adjustments Clause in Contracts

Purpose for Risk Adjustments. Risk adjustment uses information on an Enrollee’s medical conditions, as reported in Claims data, and other factors to predict health care costs and adjust payments to MCOs. Risk adjustment helps ensure payments to MCOs are more equitable and mitigates the impact of selection bias, thus protecting MCO solvency and reducing incentives for plans to avoid high-risk individuals. Risk adjustment is designed to be revenue neutral to the State.

Purpose for Risk Adjustments. Risk adjustment uses information on an Enrollee’s medical conditions, as reported in Claims data, and other factors to predict health care costs and adjust payments to MCOs. Risk adjustment helps ensure payments to MCOs are more equitable and mitigates the impact of selection bias, thus protecting MCO solvency and reducing incentives for plans to avoid high-risk high -risk individuals. Risk adjustment is designed to be revenue neutral to the State.