Commercial Risk Adjustment



Introduction1

Discussion2

Background of Risk Adjustment2

Reinsurance Program2

Entity that Contributes3

Charge to Coverage topic3

The total amount and fee assortment4

Requirements to Retain Records5

Risk Adjustment Strategies and Agenda5

Participating Entities5

Fee Coverage Subjects5

Risk Corridor Program6

Entity that Contributes6

Inclusion focus to the Fee and compensation6

Quantity and Compilation of Fee and compensation6

Recordkeeping Necessities6

Conclusion7

Commercial Risk Adjustment

Introduction

“Risk Adjustment” is a new term introduced in the field of health care. Risk adjustment is not a simple topic. The term “risk adjustment” refers to leveling the different types of risks in the patients. It helps in the comparison of the performances. The unadjusted rates of different hospitals is compared, this can unjustly punish the performing operations on the high risk patients. A risk adjusted model is used to state surgery and mortality outcomes among patients of different ages. The STS National Database includes three million records of patients. Risk adjustment is used to give patient outcomes accurately. If there is no risk adjustment, then the records of surgeon who are performing operations on high risk patients would be unjustly punished

The Patient Protection and Affordable Care Act (ACA) imply a variety of broad based fees and taxes on the services related with the provision of health care coverage. These implications by ACA are used to help control the expansion of cost of health care coverage. These include fees pertaining to “reinsurance programs”, “risk adjustment programs” and “risk corridor programs”. These programs are associated with the funding to health insurance exchanges and individual market. The taxes and fees are applied to manufacturers of pharmaceutics and medical devices, issuers of health insurance, administrators of third party and prescription drugs manufacturing companies and importers of manufacturing drugs. Some part of the fees and taxes will be applicable in 2014, while some part is applicable from now onwards. This will lead to rise in the cost of health care coverage to the employer. It will be significant if the employers consider the taxes as applicable from now before they are fully applied.

Discussion

Background of Risk Adjustment

According to ACA the public health insurance Exchanges will be accessible in all the states of the country by 2014. Exchanges are market health sites for the health insurance. They are under control of state or federal bodies. These market sites provide opportunity to small firms and individual markets to buy private health insurance. The private health insurance is considered as “qualified health plans”. The federal government is responsible to operate Exchanges in the states where the exchanges are not operative. The ACA provides reinsurance, risk corridors and risk adjustment.

Reinsurance Program

In the first three years from 2014-2016 the reinsurance program held the responsibility to provide stabilize premiums for the coverage in the individual market along with the operation of exchanges. For the support of reinsurance plan, all the health insurers and TPAs are fully responsible. These health insurers must contribute on the behalf of self insured group health plans.

Entity that Contributes

Regulations associated with reinsurance program shows that there is a need of a “contributing entity” that must ...