Why Does My RAF Change?
To answer that question, let’s back up a bit.
CMS publishes the CMS-HCC risk-adjustment model they use to calculate the Risk Adjustment Factor (RAF) of each member in your plan. Every month, they provide you with the results of that calculation in the Monthly Membership Report (MMR) for your plan. What’s more, they provide all the information you need to verify their calculation in the corresponding Part C Risk Adjustment Model Output Report (or MOR, for short). In other words, the RAF calculation is designed to be audited by you, to ensure that CMS isn’t making mistakes in calculation, and hence, payment.
If you look at the model, you will see that individual RAFs are affected by age (as well as gender, but this doesn’t usually change), their status (e.g. newly enrolled, disabled, institutionalized, ESRD), and their diagnoses.
BUT…
CMS fixes the “risk-adjustment” age for a member for the entire year (based on their age as of February 1 of that year). So, birthdays don’t cause a change in a member’s RAF.
AND…
Even though you add to member diagnostic information by submitting RAPS files on a daily, weekly, or monthly basis, CMS only makes RAF changes based on this information twice a year:
There’s one other wrinkle. When a member “ages in” to Medicare, they receive a “new enrollee” factor. For example, a 65-year-old man aging in to Medicare in 2007 receives a default RAF of 0.543, which may not reflect the actual risk he represents.
What this all means is that when your plan’s average RAF changes from month to month, you are seeing the effects of three things:
CMS publishes the CMS-HCC risk-adjustment model they use to calculate the Risk Adjustment Factor (RAF) of each member in your plan. Every month, they provide you with the results of that calculation in the Monthly Membership Report (MMR) for your plan. What’s more, they provide all the information you need to verify their calculation in the corresponding Part C Risk Adjustment Model Output Report (or MOR, for short). In other words, the RAF calculation is designed to be audited by you, to ensure that CMS isn’t making mistakes in calculation, and hence, payment.
If you look at the model, you will see that individual RAFs are affected by age (as well as gender, but this doesn’t usually change), their status (e.g. newly enrolled, disabled, institutionalized, ESRD), and their diagnoses.
BUT…
CMS fixes the “risk-adjustment” age for a member for the entire year (based on their age as of February 1 of that year). So, birthdays don’t cause a change in a member’s RAF.
AND…
Even though you add to member diagnostic information by submitting RAPS files on a daily, weekly, or monthly basis, CMS only makes RAF changes based on this information twice a year:
- January 1, for ICD-9s submitted to RAPS by the preceding September
- July 1, for ICD-9s submitted to RAPS by the preceding March
There’s one other wrinkle. When a member “ages in” to Medicare, they receive a “new enrollee” factor. For example, a 65-year-old man aging in to Medicare in 2007 receives a default RAF of 0.543, which may not reflect the actual risk he represents.
What this all means is that when your plan’s average RAF changes from month to month, you are seeing the effects of three things:
- Additional diagnostic information from claims or retrospective review (January and July only)
- New enrollees (typically dropping your average RAF)
- Changes in member status
The best way to get a handle on changes to your average RAF is by analyzing your monthly MMR file to understand how much each of these factors is affecting it.
As always, we welcome your questions about risk adjustment for Medicare Advantage plans.
(everything we know about RAFs comes from the most-recent Regional Training Participant's Guide)
posted by Michael Duffy at 11:54 AM
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