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What is a risk adjustment factor (RAF)?

  • An RAF score is a metric tied to each individual member, which reflects the health status of that member used by CMS to calculate payment. A beneficiary's RAF is based on health conditions the beneficiary may have (specifically, those that fall within a Hierarchical Condition Category, or HCC), as well as demographic factors such as Medicaid status (defined as having at least one month of Medicaid eligibility during the base year), gender, aged/disabled status, and whether a beneficiary lives in the community (i.e., beneficiaries who reside in the community or have been in an institution for fewer than 90 days) or in an institution (i.e., beneficiaries who have been in an institution for 90 days or longer). There are approximately 8,000 diagnosis codes, many of which represent chronic conditions, which impact RAFs. RAF scores are calculated every year; therefore, relevant, present health conditions need to be coded every year to maintain that patient's RAF.

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