Medicare Risk Adjustment (MRA) enables Medicare Advantage plans and provider groups to align reimbursement with documented patient complexity. Its accuracy depends on consistent documentation, precise coding, and coordinated clinical–administrative workflows.

• CMS-HCC models convert documented diagnoses into RAF that drive future-year payments.
• MEAT-supported documentation is essential for accurate risk capture and audit readiness.
• Incomplete, vague, or outdated coding can result in revenue leakage and compliance exposure.
• Annual CMS model updates require continuous training and workflow adaptation.
• Integrated CDI–coding workflows supported by technology improve accuracy across the MRA cycle.

‍

Introduction

Accurate Medicare Advantage reimbursement depends on how consistently clinical complexity is captured through documentation and coding. 

Medicare Risk Adjustment (MRA) offers the structure for aligning reimbursement with patient acuity, but achieving reliability requires disciplined documentation practices and standardized coding workflows.

Even small gaps—missed chronic conditions, insufficient specificity, or unsupported diagnoses—can shift a patient’s RAF and introduce financial or compliance-related exposure. Expectations for accuracy continue to rise as CMS refines the HCC model each year under the CMS-HCC V28 update.

This MRA 101 guide outlines the CMS-HCC framework, documentation standards, operational workflow, and best practices needed for accurate and compliant risk adjustment.

‍

What Is Medicare Risk Adjustment? (MRA 101 Overview)

Medicare Risk Adjustment is the methodology used by the Centers for Medicare & Medicaid Services (CMS) to ensure that Medicare Advantage plans and provider groups are reimbursed based on the documented clinical risk of their members.

Each beneficiary is assigned a Risk Adjustment Factor (RAF) based on their demographic and documented medical conditions. This value adjusts payments so that organizations caring for higher-acuity enrollees receive more funding. 

For example, a patient with chronic kidney disease, diabetes, and heart failure will generate a higher RAF than one with only hypertension—if all conditions are properly documented.

‍

Understanding the Relationship Between MRA and RAF

Medicare’s risk adjustment system relies on two closely linked components—MRA and RAF—that work together to translate documented clinical complexity into reimbursement.

MRA is the overall methodology CMS uses to assess clinical risk, whereas RAF is the numerical value produced by that methodology, reflecting the documented disease burden of an individual member.

The connection between the two becomes clear in operations:

• Documentation establishes the clinical picture MRA can assess.
• Coding and CDI review determine which diagnoses correctly map to HCCs or RxHCCs.
• MRA logic evaluates those conditions for risk relevance. 
• RAF becomes the resulting score used to adjust Medicare Advantage payment.

‍

If a condition is poorly documented, lacks MEAT support, or is not recaptured annually, the MRA logic excludes it—reducing the RAF.

If documentation is specific, validated, and coded correctly, the MRA model captures all appropriate HCCs—producing a RAF that fully reflects patient complexity.

‍

How the CMS-HCC Model Supports Risk Adjustment

Through the Hierarchical Condition Categories (HCC) model, CMS organizes clinically similar diagnoses into weighted categories that estimate expected cost and utilization.

Risk adjustment under this model depends on:

• Demographics: Age, gender, disability, and dual eligibility status.
• Categorized diagnoses: ICD-10 codes assigned to HCCs with specific weights.
• Comorbidity interactions: Coexisting conditions that increase cumulative risk scores.

CMS conducts yearly updates to refine weights and categories as per updated clinical and cost data. The V28 revision, for example, expanded chronic disease classifications and enhanced the precision of the coding hierarchy.

‍

Documentation & Coding Requirements for Accurate MRA

Risk adjustment accuracy depends heavily on documentation quality. CDI specialists and coders rely on provider notes to assign correct HCC-linked diagnoses.

A diagnosis counts toward risk adjustment only when it meets core criteria:

• Documented during an eligible in‑person or CMS‑accepted telehealth encounter (through September 30, 2025)
• Documented with MEAT (Monitor, Evaluate, Assess, Treat)
• Coded using specific ICD-10 terminology
• Recaptured annually—chronic conditions must be documented each calendar year

‍

For example:

“Heart failure” without further detail won’t risk-adjust. “Acute on chronic systolic heart failure” will, because it specifies type, acuity, and severity.

‍

MRA Workflow for Accurate Risk Capture

Accurate risk adjustment depends on the alignment of several interdependent steps:

1. Encounter documentation: Providers document every active condition discussed during the visit.

2. Coding and validation: Coders review these details and assign ICD-10 codes that map to the right HCCs.

3. Data submission: The validated diagnoses are then submitted to CMS through EDPS or RAPS.

4. RAF calculation: CMS reviews the data and applies HCC weights to determine the RAF.

5. Payment adjustment: RAF influence plan reimbursements for the following year.

Since the model is forward-looking, gaps in documentation today become revenue losses tomorrow.

‍

Common Gaps That Affect Accurate RAF Capture

Healthcare organizations frequently encounter issues that hinder accurate risk adjustment:

• Insufficient documentation: Chronic conditions may be missed or not validated annually.

• Inconsistent Coding Practices: Lack of uniformity between the coders and CDI specialists.

• Constantly changing CMS Models: Revised often, necessitating regular training for the staff.

• Audit Vulnerability: Unsupported diagnoses can trigger costly payment recoupments.

• Operational fragmentation: Lack of cross-team alignment weakens end-to-end risk capture.

These obstacles introduce both financial variability and compliance risk, making coordinated, standardized workflows essential.

‍

Best Practices for Accurate Medicare Risk Adjustment

Accurate MRA depends on coordinated strategies that integrate clinician education, technology adoption, and disciplined oversight across care teams.

‍

1. Provider-Centric Documentation Education

Clinicians require consistent training to document chronic conditions with MEAT-level precision, capture acuity, and ensure annual recapture. This enables high-impact diagnoses to be accurately reflected within the CMS-HCC framework.

HOM advances this process by reviewing encounter documentation and providing focused feedback to help providers refine specificity and decrease undocumented or ambiguous conditions that affect RAF accuracy.

‍

2. Technology-Driven Assistance

Precision in ICD-10 assignment is essential for translating clinical detail into correct HCC mapping. Coders must verify that every documented condition meets CMS criteria for risk adjustment inclusion. Without precise ICD-10 to HCC mapping, even well-documented conditions 

can fail to generate appropriate risk scores

HOM strengthens coding performance through its AI-assisted model, delivering 99% medical coding accuracy and a 48–72 hour turnaround post-visit.

‍

3. Integrated CDI and Coding Workflows

Accurate MRA requires CDI and coding teams to operate from the same clinical interpretation. Coordinated review of chronic conditions and clear clarification pathways lower the risk of omissions and unsupported codes.

HOM enhances this workflow by embedding CDI feedback within coding processes, allowing teams to validate diagnoses more effectively and improve overall consistency.

‍

4. Proactive Quality Audits

Routine audits reveal high-impact documentation gaps—such as underreported chronic conditions or inadequate MEAT support that influence RAF values. Trend reviews help determine where documentation habits need improvement.

HOM conducts targeted audit evaluations and performance reviews, offering data-driven insights that strengthen accuracy and enhance audit readiness.

Accurate MRA requires consistent capture of clinical complexity. HOM strengthens outcomes by improving documentation clarity, maintaining coding accuracy through its human-in-the-loop model, and providing focused audit insights that help preserve RAF accuracy and compliance.

To discuss how HOM can reinforce your MRA workflows, contact partnerships@homrcm.com.

‍

FAQs

1. What is the purpose of Medicare Risk Adjustment?
MRA aligns reimbursement with patient complexity by using documented conditions to determine expected resource needs for each Medicare Advantage member.

‍

2. What is RAF?
RAF reflects a member’s disease burden using demographic and documented clinical information. Higher values indicate higher projected costs.

‍

3. How often must diagnoses be documented?
Chronic conditions must be re-documented annually through face-to-face encounters with eligible providers to be counted for risk adjustment.

‍

4. Can RCM teams directly impact RAF or MRA?

Yes. RCM teams influence RAF by improving documentation accuracy, coding precision, MEAT validation, and audit readiness. CMS controls the final RAF calculation, but providers control the inputs.

‍

5. How can healthcare organizations improve MRA accuracy?
Accuracy improves through strong provider documentation practices, coordinated CDI–coding workflows, MEAT-supported diagnoses, and routine audit reviews.