AAPC-CRC Certified Risk Adjustment Coder - Set 4 - Part 2

Correct Answer: Capitated per member per month payment

CMS typically pays MAOs a capitated, per member per month (PMPM) rate for each enrollee in an MA plan. These payments are based, in part, on enrollees' health status from the prior year. Option b is incorrect because is the approach risk adjustment replaces; CMS pays plans for the risk of the beneficiaries they enroll rather than an average. Option c is incorrect because describes payment tied to individual services, whereas CMS guidance describes a fixed monthly rate for each enrollee who joins an MA plan. Option d is incorrect because leaves out health status, yet the capitated rate is based in part on health status from the prior year.

Correct Answer: Sicker enrollees generally receive higher risk scores

CMS derives a risk score for each enrollee, partly from submitted diagnoses. Sicker patients generally receive higher risk scores, and higher risk scores result in higher per member per month payments to the MA plan. Option a is incorrect because risk adjustment is designed so plans have no incentive to target healthy enrollees or avoid sicker ones; it does not reward healthier enrollment. Option b is incorrect because risk adjustment replaces an average amount for Medicare beneficiaries with payment reflecting each enrollee's risk, so a flat average would not produce different payments. Option c is incorrect because standardized bids serve as base payments, but scores built from health status and demographics then adjust payment for each beneficiary's expected expenditures.

Correct Answer: Set provider fee schedules for each service

CMS uses risk adjustment to standardize bids, compare bids across populations with different health statuses, and adjust plan payment to enrollee characteristics. Setting provider fee schedules for services is not among the stated uses. Option a is incorrect because CMS lists this as a use of risk adjustment, so that each plan has a bid for the average Medicare beneficiary. Option b is incorrect because comparing bids based on populations with different health statuses and other characteristics is named among the uses CMS has for risk adjustment. Option d is incorrect because payment adjustment is a stated use, since CMS ties plan payment to the characteristics of the population actually enrolled.

Correct Answer: Bidding and payment

The Medicare Part C manual states that both the Medicare Advantage and Prescription Drug programs include risk adjustment as a component of the bidding and payment processes. Risk scores adjust bids and payments based on enrollee health status and demographics. Option a is incorrect because the guidance places risk adjustment within the bidding and payment processes, so claims adjudication and appeals are not the pair it names. Option c is incorrect because the guidance links risk adjustment to bids and payments, and it does not name enrollment or eligibility as processes that include a risk adjustment component. Option d is incorrect because the guidance names bidding and payment as the processes that include risk adjustment, not credentialing or contracting.

Correct Answer: I and II

CMS developed separate risk adjustment models for Parts A and B benefits under Part C and for Part D benefits. Within each benefit, it also developed segments for subpopulations with distinct cost patterns. Statements I and II are accurate. Option b is incorrect because statement III is false, because CMS built separate models for Part C and Part D rather than one combined model, even though statement I is accurate. Option c is incorrect because statement IV misstates the benchmark; risk scores predict expenditures relative to the average beneficiary, not the highest-cost one, although statement II is accurate. Option d is incorrect because both statements are inaccurate: the models are separate by benefit, and the comparison point for predicted expenditures is the average beneficiary.

Correct Answer: Benefits Improvement and Protection Act (BIPA)

BIPA required implementation of a risk adjustment model using diagnoses from ambulatory settings in addition to inpatient hospital stays. This broadened the data used for Medicare Advantage payment beyond the inpatient-only approach. Option a is incorrect because it extended prescription drug coverage, renamed Medicare+Choice as Medicare Advantage, and set up risk adjustment for Part D rather than requiring ambulatory diagnoses. Option b is incorrect because it is not described in Medicare risk adjustment history as the law that expanded the diagnoses used in payment models. Option c is incorrect because it mandated risk adjustment based initially only on inpatient hospital stays, with other sites of care added in a later implementation.

Correct Answer: More stable payments

CMS phased in risk adjusted payment by adjusting only a portion of the payment under the new health status method, with the remainder still based on demographics. This phase-in was intended to provide more stable payments. Option a is incorrect because the phase-in addressed payments made to Medicare+Choice organizations, and the guidance does not link it to the premiums enrollees pay. Option c is incorrect because network size is a separate plan matter; the phase-in blended two payment methods rather than changing which providers a plan contracts with. Option d is incorrect because claims processing speed is not mentioned in CMS guidance as a reason for the phase-in, which was meant to steady payments to organizations.

Correct Answer: The enrollee is validly enrolled in an MA plan

Under 42 CFR 422.504(l)(1), the CEO, CFO, or a delegate reporting directly to one of them must certify that each enrollee for whom payment is requested is validly enrolled in an MA plan offered by the organization. Option a is incorrect because the 6-year retention extension applies to records after a termination, dispute, or allegation of fraud, and is not an enrollee-level certification. Option b is incorrect because applicable reconciliation is a date tied to the annual final deadline for risk adjustment data submission, not an attribute of an enrollee that the officer certifies. Option d is incorrect because overpayment identification is governed by the separate reporting and returning rule, which is triggered when an organization knowingly receives or retains an overpayment, not by the enrollee certification.

Correct Answer: Site neutral

The site neutral characteristic means HCC-based models do not distinguish payment based on a site of care, so a diagnosis from a physician setting and one from a hospital outpatient setting are treated alike. Option b is incorrect because hierarchies rank Condition Categories by severity and cost dominance so the most serious disease gets credit; they say nothing about where care occurred. Option c is incorrect because this characteristic describes how a risk score is built by summing demographic and disease coefficients, not how the care setting is treated. Option d is incorrect because a prospective model uses base year diagnostic information to predict costs for the following year, which concerns timing rather than the site of care.

Correct Answer: Selected Significant Disease (SSD) Model

The Selected Significant Disease (SSD) Model considers serious manifestations of a condition rather than all levels of severity, while still including most body systems and conditions. That is the characteristic the excerpt describes. Option a is incorrect because hierarchies rank Condition Categories by severity and cost dominance so credit goes to the most serious disease, rather than limiting which manifestations the model considers. Option c is incorrect because this characteristic means the models do not distinguish payment based on a site of care, so it says nothing about condition severity. Option d is incorrect because it describes using base year diagnostic information to predict Medicare benefit costs for the following year, which concerns timing of prediction, not which severity levels are counted.

Correct Answer: Prospective model

A prospective model uses diagnostic information from a base year to predict Medicare benefit costs for the following year. That timing relationship is what the scenario describes, and it separates this characteristic from the other HCC model features. Option a is incorrect because it means the models do not distinguish payment by site of care, which says nothing about using base-year diagnoses to estimate later costs. Option b is incorrect because it places Condition Categories in order of severity and cost dominance so the most serious condition gets credit, not a forecast of next-year costs. Option c is incorrect because it describes how an individual risk score is built by adding coefficients for demographic and disease factors, not the timing of the diagnoses.

Correct Answer: The most severe and costly manifestation

Disease hierarchies rank clinically related HCCs by cost. Part C payment is based only on the most severe and costly manifestation, so less serious related conditions do not add to the risk score. Option b is incorrect because this reverses the hierarchy logic, since the guidance bases payment on the top-ranked condition and not on the lowest-cost one. Option c is incorrect because recency of reporting plays no part in a hierarchy; the guidance ranks related HCCs by severity and cost, not by reporting date. Option d is incorrect because hierarchies do not blend conditions into an average; related HCCs are prioritized so only one counts toward the score.

Correct Answer: Clinical relationship, ranked by cost

Under the disease hierarchy provision of the Medicare manual, hierarchies prioritize inclusion of multiple HCCs where the diagnoses are clinically related and ranked by costs. Part C payment then rests on the most severe and costly manifestation. Option a is incorrect because a base year is how the prospective model uses diagnostic information to predict next-year costs; it does not decide which related HCCs a hierarchy prioritizes. Option b is incorrect because disabled status belongs to disease and disabled interactions, which raise scores when another factor signals higher costs; it does not rank related conditions within a hierarchy. Option d is incorrect because the models are site neutral and do not distinguish payment by site of care, so location plays no part in ordering HCCs within a hierarchy.

Correct Answer: Disease hierarchies

CMS publishes disease hierarchies in the Rate Announcement for the years when it recalibrated the CMS-HCC model. Hierarchies rank clinically related HCCs by cost so payment rests on the most severe manifestation. Option b is incorrect because interactions are additive factors that raise a risk score when another disease or disabled status indicates higher costs; they are not the element tied to Rate Announcement publication. Option c is incorrect because this characteristic describes where diagnoses may come from, namely hospital inpatient, hospital outpatient, and physician settings, and says nothing about publication in the Rate Announcement. Option d is incorrect because it is a model characteristic meaning payment does not differ by site of care, so it concerns payment neutrality rather than ranking related conditions.

Correct Answer: Score reflecting known underlying risk profile and chronic health status of similar individuals

Under the special needs improvements, the Secretary uses a risk score reflecting the known underlying risk profile and chronic health status of similar individuals, instead of the default risk score for new enrollees in other MA plans. Option a is incorrect because those concentration costs are something the periodic evaluation tries to account for, not the risk score that replaces the default for new enrollees. Option b is incorrect because those are demographic risk factors in the general payment adjustment, not the substitute score applied to special needs individuals in specialized plans. Option c is incorrect because that describes the coding adjustment, which addresses coding pattern differences with fee-for-service providers and is a separate paragraph from the special needs risk score.

Correct Answer: The announcement under subsection (b)

The statute requires the Secretary to publish, as part of an announcement under subsection (b), a description of any evaluation of the risk adjustment system conducted during the preceding year and any revisions made as a result. Option a is incorrect because the coding differences analysis compares Medicare Advantage and fee-for-service coding patterns to ensure payment accuracy; the statute does not designate it as the place for publishing special needs evaluations. Option c is incorrect because enrollment in a specialized MA plan only defines which special needs individuals are described, and the statute assigns no evaluation publication duty to it. Option d is incorrect because the default risk score applies to new enrollees in plans that are not specialized MA plans, and the statute gives it no publication role for evaluations.

Correct Answer: Coding adjustment

The coding adjustment ensures the health status adjustment reflects differences in coding patterns between Medicare Advantage plans and providers under Parts A and B, to the extent the Secretary has identified such differences, and the Secretary analyzes them annually. Option a is incorrect because it is one of the listed risk factors, alongside age, sex and disability status, and describes the individual's living setting, not how diagnoses are coded across settings. Option b is incorrect because it uses the known underlying risk profile and chronic health status of similar individuals, and applies to certain special needs individuals rather than to coding pattern differences. Option d is incorrect because it is the standard score for new enrollees in plans that are not specialized plans, and does not measure coding differences between settings.

Correct Answer: I, II, and III

CMS requires that submitted diagnosis codes be documented in the medical record, result from a face-to-face visit, and be coded per ICD Clinical Modification Guidelines. Acceptable sources are facilities and physicians, not plan sponsor staff. Option a is incorrect because it leaves out the coding requirement; the guidance also says the diagnosis must be coded according to ICD Clinical Modification Guidelines for Coding and Reporting. Option c is incorrect because it includes statement IV, which invents a staffing rule, and it drops the medical record requirement that the guidance does state. Option d is incorrect because statement IV has no basis in the guidance, which names hospital inpatient facilities, hospital outpatient facilities, and physicians as acceptable sources, and this choice omits the face-to-face visit requirement.

Correct Answer: periodically

The regulation and statute direct that for the starting year and periodically thereafter, the Secretary evaluates and revises the risk adjustment system to account for higher costs tied to frailty, multiple comorbid chronic conditions, and mental illness. Option a is incorrect because the guidance sets no monthly schedule; it directs evaluation for the starting year and periodically after that, not on a fixed monthly cycle. Option b is incorrect because the guidance ties the evaluation to no plan renewal event; it calls for review on a periodic basis after the starting year. Option d is incorrect because the evaluation is a duty placed on the Secretary, not a step triggered by an enrollee's request, so this describes a different process.

Correct Answer: The MA organization

Under 42 CFR 422.310(d)(4), MA organizations may include provisions in their contracts with providers, suppliers, physicians, and other practitioners requiring complete and accurate risk adjustment data, and those provisions may include financial penalties. Option b is incorrect because receives the electronically submitted data from MA organizations; the regulation gives it no role in writing contract terms with providers. Option c is incorrect because is the person who receives items and services; the regulation does not place an enrollee in the contracting role described here. Option d is incorrect because is the party from whom data must be obtained, so this practitioner is bound by such terms, not the one adding them.