The Centers for Medicare and Medicaid services (CMS) implemented the Risk Adjustment Payment System (RAPS) program as a way to determine a Medicare Advantage member’s premium on a prospective basis. The goal is to pay MA and Prescription Drug Plans (PDPs) accurately and fairly by adjusting payment for members based on demographics and health status.

To properly estimate the dollars required on a member by member basis, over 17,000 ICD-9s (and ICD-10s) have been analyzed and nearly 3,000 of those have been cross-walked to 90+ Hierarchical Condition Categories (HCC). Each of the HCCs have a value attached to the payment model. When those values are added together with age/sex and additional factors, the sum results in the Medicare Risk Adjustment (MRA) score. Health plans and providers may conduct claim audits to ensure all correctly documented diagnosis codes have been submitted.

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