Physicians Advocacy Institute

Frequently Asked Questions Updated for 2020


5. How do risk adjustment factors impact the cost category?

  1. To calculate the two measures included in the cost category, risk adjustment factors are considered. Expected Medicare Spending Per Beneficiary Clinician (MSPB-C) costs are calculated using a model based on the CMS Hierarchical Condition Category (CMS-HCC) risk adjustment methodology for Medicare Advantage (MA), with a few differences, and with the inclusion of interactions terms between HCCs and/or enrollment status variables. The Total Per Capita Cost (TPCC) measure is risk-adjusted based on CMS-Hierarchical Condition Category (HCC) risk score and End Stage Renal Disease (ESRD) status, compared to the actual per capita costs with expected per capita costs, and multiplied by the average non-risk-adjusted cost across all attributed beneficiaries. For additional information, download the CMS Cost Measure Code Lists available on the CMS QPP Resource Library.

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