Common use of Purpose for Risk Adjustments Clause in Contracts

Purpose for Risk Adjustments. Contractor payments will be adjusted for differences in Member health status based upon Encounter data. 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 Commonwealth. Health- based risk adjustment uses information on Member’s medical conditions, as reported in claim and encounter data to predict prospective or concurrent health care costs and adjustment payments to MCOs. The payment rates for all Eligibility Categories will be risk adjusted with the exception of Dual Eligibles. The following are descriptions of the risk assessment methodologies that will be employed to adjust payments to the Contractor.

Purpose for Risk Adjustments. Contractor payments will be adjusted for differences in Member health status based upon Encounter data. 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 Commonwealth. Health- Health-based risk adjustment uses information on Member’s medical conditions, as reported in claim and encounter data to predict prospective or concurrent health care costs and adjustment payments to MCOs. The payment rates for all Eligibility Categories will be risk adjusted with the exception of Dual Eligibles. The following are descriptions of the risk assessment methodologies that will be employed to adjust payments to the Contractor.