Risk Adjustment

The Purpose of Risk Adjustment

How to calculate a risk score: In CMS’ calculation of the MA payment, CMS includes an additional factor in the risk score based on the original reason the beneficiary became legible for Medicare.

Below outlines the application of the factor based on original reason for entitlement.

Original Reason for entitlement Codes and Descriptions OREC Description Factor application

0. Beneficiary insured due to age CMS applies no additional actor.

1. Beneficiary insured due to disability CMS applies the same factor for OREC 1 and 3.

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