The Tool Desk
Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Risk adjustment analytics uses clinical, demographic, claims, and administrative data to estimate the relative expected cost or risk of a covered population. In U.S. Medicare Advantage, those estimates help determine plan payments that account for differences in enrollees’ health status. They are population-level estimates—not a separate payment for treating each diagnosis—and any diagnosis submitted must be supported by the enrollee’s medical record.
What is risk adjustment in healthcare?
Risk adjustment is a method for accounting for differences in the expected health costs of people enrolled in a health plan. Analytics applies that method to data so an organization can estimate risk across individuals and groups, identify records or populations for review, and support payment or care-planning processes.
The rules depend on the program. This article focuses on the U.S. federal Medicare Advantage program and its CMS-HCC model. Medicaid, commercial insurance, and systems outside the United States may use different models and requirements.
How does Medicare Advantage risk adjustment work?
CMS uses diagnosis information to assign enrollees to hierarchical condition categories (HCCs), which help predict relative costs. A risk score reflects the model’s estimate for an enrollee in relation to the population and is used as part of plan payment calculations. An HCC is not a direct fee for treating a condition: payment depends on the total risk score and the model’s design.
Recommended Free Tools
#1 Best Overall
- Used Book in Good Condition
Model year matters. CMS completed the phase-in of its 2024 CMS-HCC model for calendar year (CY) 2026, after beginning the transition in CY 2024. For CY 2025, CMS blended 67% of the 2024-model score with 33% of the 2020-model score. For CY 2026, CMS calculated 100% of risk scores using the 2024 model. CMS also continued its multiple linear regression approach to fee-for-service (FFS) normalization for CY 2026. See CMS’s Medicare risk-adjustment resources for year-specific software and mappings; do not assume one year’s specifications apply to another.
For CY 2025, CMS’s normalization methodology used the most recent five available years of average FFS risk scores, 2019–2023, and distinguished service dates before 2020 from those in 2020 and later. These normalization details are separate from the 67%/33% model blend.
A related program with different rules
The HHS-operated risk-adjustment program for the individual and small-group markets is distinct from Medicare Advantage. For the 2025 benefit year, CMS finalized recalibration of the HHS models using enrollee-level EDGE data from 2019, 2020, and 2021. That is not the CMS-HCC model used for Medicare Advantage.
How does risk adjustment analytics work?
Analytics tools process available data to estimate risk, sort members or providers into groups, and identify records or potential documentation gaps for review. Depending on the organization and product, workflows may support prospective identification, concurrent review, retrospective review, coding, record retrieval, encounter management, or campaign tracking.
Rank #2
A flagged condition is a prompt to investigate, not a confirmed diagnosis. A clinician must determine whether the condition is present, and the medical record must support any diagnosis submitted for risk adjustment. Analytics can help organize review; it cannot make an unsupported diagnosis valid.
What are the benefits—and limits—of risk adjustment analytics?
- More organized review: Large datasets can be used to prioritize members, providers, or records for follow-up rather than reviewing every record in the same order.
- Population insight: Stratification and group-level results can help organizations understand differences in expected risk and plan operational or care-management work.
- Documentation and workflow support: Gap analysis, coding workflows, record retrieval, and encounter management can help coordinate administrative tasks.
- Appropriate payment and planning: Better-supported risk estimates can help align payment and planning with the health needs of a covered population.
These benefits depend on data quality, suitable model specifications, effective clinical review, and complete documentation. Vendor descriptions of features do not independently establish better clinical outcomes, higher payment accuracy, or compliance.
What documentation is required for risk adjustment?
For Medicare Advantage risk adjustment, submitted diagnoses must be supported in the enrollee’s medical records. CMS’s Risk Adjustment Data Validation (RADV) program checks whether diagnoses used for payment are supported. CMS states: “If diagnoses are unsupported by the medical records, CMS may collect overpayments.” See the CMS RADV program page.
That makes clinical validation and a traceable record-review process central controls, not optional extras. A suspected condition surfaced by an algorithm should not be submitted as a diagnosis unless it is confirmed and documented in accordance with applicable program requirements.
Do these 3 things before closing this tab:
1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteRank #3
- Used Book in Good Condition
What changed in the CMS-HCC model?
CMS says the 2024 model uses more recent diagnosis and cost data, restructures categories to align with ICD-10, and incorporates technical and clinical revisions intended to improve predictive accuracy. The phased transition ended for CY 2026, when CMS moved to 100% use of the 2024 model for risk scores. Organizations working across payment years should verify the relevant software and ICD-10 mappings through CMS’s risk-adjustment resource page.
CMS’s 2026 advance-notice fact sheet estimated that pausing the phase-in would have produced $3.4 billion in additional payments to Medicare Advantage plans in 2026. This was CMS’s policy estimate in an advance notice, not a report of final realized payments.
What should organizations compare in risk adjustment tools?
Product materials describe capabilities, not an independent head-to-head ranking. For example, Optum describes suspecting, gap analytics, member and provider stratification, campaign management, and reporting for health plans and provider organizations (Optum Risk Analytics). Cotiviti describes record retrieval and coding, second-level review, retrospective review, prospective and concurrent workflows, and encounter management (Cotiviti Risk Adjustment). Cotiviti also describes DxCG Intelligence as predictive models that produce individual risk scores and group-level results; its account of the models’ history and relationship to CMS should be understood as a vendor statement (Cotiviti DxCG Intelligence).
Before selecting a tool or service, compare the following against your organization’s needs:
Quick Recap
- Population and line of business: Confirm the product supports the population and program you serve, rather than assuming Medicare Advantage, marketplace, Medicaid, and commercial workflows are interchangeable.
- Workflow timing: Establish whether it supports prospective, concurrent, retrospective, or a combination of review.
- Data inputs: Check which clinical and administrative sources it can use and how it handles incomplete or conflicting data.
- Model maintenance: Confirm how model versions, diagnosis mappings, and payment-year changes are updated and communicated.
- Review controls: Understand how clinical validation, coding review, record retrieval, and encounter processes fit together.
- Integration and traceability: Assess system integration, explanations for flags or scores, and the audit trail available to reviewers.
- Evidence of performance: Ask what outcomes have been independently validated and under what conditions; distinguish that evidence from vendor-stated capabilities.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
