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Shahyan Currimbhoy

Posted on August 09, 2022 | 2 min read

A 3% Annual RAF Improvement isn’t Nearly Enough


Financial Optimization

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Depending on the individual risk sharing arrangement, CMS will cap annual risk score improvement to a 3% RAF lift over the benchmark for a population. This can lead to a very common assumption, that 3% can be used as an obvious, un-nuanced goal for risk adjustment strategy each year.

Unfortunately, this is incorrect. Fortunately, we’re here to help.

For organizations that may be making this mistake, we want to offer our ebook, Staying Ahead of the Curve: National Risk Trends and Their Impact on Care Funding.

In it you’ll find a plain language primer on how benchmarks are calculated and recalculated.

You’ll learn how your risk adjustment payments can change retroactively even without a retrospective review of submissions through changes in coding intensity factors by CMS.

You’ll come to understand regional and national trends, and how your population size, and changes to it, can change your benchmark.

You’ll even see how something like economic inflation can move the goalpost.

Each of these (and more) contribute to how a 3% RAF lift is not actually 3%, and targeting that cap means your risk target is much, much too low. And when your target is too low, the downstream consequences of an incomplete and inaccurate risk profile are significant:

  • Chronic conditions are being left un-or-under documented, hamstringing physicians from creating effective care plans inclusive of all comorbidities.
  • Potentially millions of dollars of care funding go unclaimed, increasing pressure from expenses.

Risk adjustable populations continue to grow. Understanding the calculations, and being able to share that understanding with colleagues that do not work directly with risk, has never been more important. Our ebook helps you understand and discuss the nuance of value-based care and support your organization’s continued success with a compliant, effective risk adjustment strategy. Get your copy today.

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