Certified Risk Adjustment Coder (CRC)

Which statement is TRUE regarding risk scores in risk adjustment models?

1. They are based on previous year's data only

2. They are used to directly adjust provider salaries

3. They adjust payments based on beneficiaries' expected expenditures

4. They monitor only inpatient outcomes

The correct answer is: They adjust payments based on beneficiaries' expected expenditures

Risk scores in risk adjustment models serve a critical purpose in healthcare financial management by adjusting payments based on the expected healthcare expenditures of beneficiaries. This approach ensures that healthcare providers receive appropriate compensation for managing patients with varying health complexities. The determination of these risk scores involves analyzing demographic data, clinical diagnoses, and prior healthcare usage patterns to predict future healthcare costs accurately. By using this method, risk adjustment models create a more equitable payment system that accounts for the medical needs of diverse patient populations, ultimately leading to better resource allocation and care management. The other choices do not accurately reflect the purpose or method of risk score calculation. Focusing solely on previous year's data, directly linking scores to provider salaries, or limiting monitoring to inpatient outcomes does not encompass the holistic nature and broader application of risk scores.