AAPC-CRC Certified Risk Adjustment Coder - Set 5 - Part 2

Correct Answer: Model segments

CMS built separate models for the Part C and Part D benefits and, within each benefit, developed segments of the models for subpopulations with distinct cost patterns. Segments are the element that addresses such groups. Option a is incorrect because interactions are additive factors that raise a risk score when another disease or disabled status signals higher costs; they adjust an individual score and do not divide the models. Option b is incorrect because hierarchies rank Condition Categories by severity and cost dominance so a beneficiary is credited with the most serious disease, not so subpopulations receive their own model sections. Option c is incorrect because Condition Categories are the disease groups to which diagnoses are assigned for payment; they classify diagnoses and do not divide beneficiaries into subpopulations.

Correct Answer: Associated costs

Under CMS guidance, disease hierarchies prioritize the inclusion of multiple HCCs where diagnoses are clinically related and ranked by costs. The ordering therefore reflects the associated costs, so payment follows the most severe and costly manifestation. Option a is incorrect because CMS guidance ranks hierarchy members by cost, not by when the encounter occurred, so the timing of a visit does not set priority among related HCCs. Option b is incorrect because claim volume plays no part in the ranking; the hierarchy orders clinically related diagnoses by cost, so repeated reporting of a condition does not raise its position. Option d is incorrect because who treated the beneficiary is not a ranking factor; the hierarchy looks at the diagnoses themselves and orders them by their associated costs.

Correct Answer: Condition Category

In HCC-based models, risk adjusted payment rests on assigning diagnoses to disease groups, also known as Condition Categories (CCs). Each category then carries a coefficient that is added to the enrollee's other factors to form the risk score. Option a is incorrect because ranks groups that already exist by severity and cost dominance; the hierarchy orders the groups instead of being the place where diagnoses land. Option b is incorrect because relies on enrollee characteristics such as age and gender, so it is a separate factor type and not a grouping of diagnoses. Option c is incorrect because describes a model characteristic, one that limits the model to serious manifestations of a condition, rather than naming the group that receives each diagnosis.

Correct Answer: Comparing bids based on populations with different health statuses

CMS uses risk adjustment to compare bids based on populations with different health statuses and other characteristics. This lets bids from plans with healthier and sicker enrollees be evaluated on a common footing. Option a is incorrect because risk scores draw on both health status from diagnostic data and demographic characteristics such as age and gender, so dropping demographics misdescribes the models. Option c is incorrect because separate Part C and Part D models exist, but that is a model design feature and does not itself make differing populations' bids comparable. Option d is incorrect because risk adjustment replaces an average amount for Medicare beneficiaries with payment reflecting the risk of the enrollees a plan actually enrolls.

Correct Answer: Models are Additive

The Models are Additive characteristic states that an individual risk score is calculated by adding the coefficients tied to each beneficiary's demographic and disease factors. The excerpt restates that description directly. Option b is incorrect because hierarchies place Condition Categories in order of severity and cost dominance so that credit goes to the most serious disease, which is a different function from summing. Option c is incorrect because this characteristic concerns using diagnostic information from a base year to predict Medicare benefit costs for the following year, not how coefficients are combined. Option d is incorrect because this describes models that do not distinguish payment by site of care, and it says nothing about how an individual risk score is built.

Correct Answer: Disease and Disabled Interactions

Disease and Disabled Interactions allow higher risk scores for certain conditions when another disease or a demographic status, such as disabled status, indicates higher costs. These interactions are additive factors that increase payment accuracy. Option a is incorrect because hierarchies place Condition Categories in order of severity and cost dominance so credit goes to the most serious disease, rather than combining factors. Option c is incorrect because this describes a model that counts serious manifestations of a condition instead of every severity level, not a score increase from paired factors. Option d is incorrect because this characteristic means the models do not distinguish payment based on a site of care, which has nothing to do with combined conditions.

Correct Answer: Higher scores when disabled status accompanies a disease

Higher risk scores for a disease combined with another disease or disabled status come from disease and disabled interactions, a separate model characteristic. Hierarchies instead rank clinically related HCCs by cost and credit the dominant disease. Option a is incorrect because CMS describes hierarchies as prioritizing the inclusion of multiple HCCs whose diagnoses are clinically related and ranked by costs, so this is a genuine feature. Option b is incorrect because hierarchies are published in the Rate Announcement for the years when CMS recalibrated the CMS-HCC model, which makes publication part of how hierarchies work. Option d is incorrect because the model's hierarchy characteristic gives beneficiaries credit for the disease with the highest severity or the one that subsumes the costs of other diseases.

Correct Answer: The State where the employer's policy was filed and approved

Under the small group market rule at 45 CFR 153.360, enrollees in a risk adjustment covered plan must be assigned to the applicable risk pool in the State in which the employer's policy was filed and approved. Option a is incorrect because issuer location is not the stated basis; the regulation points to the State in which the employer's policy was filed and approved. Option b is incorrect because the employer's office location is not named in the rule, which looks to the State of policy filing and approval instead. Option c is incorrect because the rule ties assignment to the employer's policy, not to where individual enrollees live, so residence does not decide the applicable risk pool.

Correct Answer: Results of a programmatic and financial audit

For re-approval for each benefit year after the third, the State must submit and make public a detailed summary of program operations. The summary must include programmatic and financial audit results from an independent qualified auditing entity following GAAS. Option b is incorrect because this evidence supports the initial approval request under the standards in paragraph (c), and is not the content the later summary must carry. Option c is incorrect because this is a requirement for re-approval for a third benefit year, submitted in the first benefit year of operation, not for later years. Option d is incorrect because the regulation requires those parties to maintain and provide records on request, but it does not make a contractor list part of the summary.

Correct Answer: Severity and cost dominance

Condition Categories are placed into hierarchies reflecting severity and cost dominance. As a result, a beneficiary gets credit for the disease with the highest severity or the one that subsumes the costs of other diseases. Option a is incorrect because the models are site neutral and do not distinguish payment by site of care, so setting plays no part in hierarchy placement. Option b is incorrect because demographic and disabled-status factors enter the additive risk score and the interactions, which are separate model features from the way CCs are ranked. Option d is incorrect because these describe the prospective design, where base-year diagnoses predict next-year costs, rather than a basis for ranking Condition Categories against each other.

Correct Answer: Remit the improper payments as CMS specifies

Under the validation provision, Medicare Advantage organizations must remit improper payments based on RADV audits, in a manner specified by CMS. Remittance is the required response once an audit identifies improper payments. Option a is incorrect because the regulation requires organizations to get risk adjustment data from the provider or practitioner who furnished the service, which is a data collection step rather than a payment remedy. Option b is incorrect because electronic submission is the rule for risk adjustment data sent to the CMS contractor, not the required response to improper payments found in an audit. Option c is incorrect because separate accounting covers providers and practitioners who could bill separately under original Medicare and does not address returning payments found improper in an audit.

Correct Answer: Inform CMS immediately

CMS guidance states that when a plan sponsor discovers inaccurate diagnosis codes used in a final risk score for a previous payment year that affected final payment, the plan sponsor must inform CMS immediately. Option a is incorrect because the guidance places accuracy and integrity of submitted data on the plan sponsor, so it cannot leave discovery of its own error to CMS. Option b is incorrect because the guidance sets no waiting period for a discovered error; notice to CMS is required at once, not deferred to a later review cycle. Option d is incorrect because the finding concerns a previous payment year whose final risk score is already calculated, and the guidance calls for notice upon the finding, not at a later date.

Correct Answer: I and II

The risk score of each sampled enrollee is validated by checking enrollment and demographic data in a manner HHS determines, and by validating health status through review of all relevant medical record documentation. Statements I and II match. Option b is incorrect because statement III is false, since medical record documentation must originate from the provider of the services, not from any party that merely handled the claim. Option c is incorrect because statement IV fails because HHS, not the issuer, determines the manner in which enrollment data and demographic data are validated for each sampled enrollee. Option d is incorrect because both statements are false: documentation must come from the provider of services, and HHS sets the enrollment validation method, which also leaves statements I and II unselected.

Correct Answer: MAOs, PACE organizations, and 1876 Cost HMO/CMPs

CMS defines plan sponsors as Medicare Advantage Organizations (MAOs), PACE organizations, and 1876 Cost HMO/CMPs. These sponsors must ensure the accuracy and integrity of the risk adjustment data they submit to CMS. Option a is incorrect because CMS guidance names MAOs, PACE organizations and 1876 Cost HMO/CMPs as plan sponsors; Part D sponsors and ESRD facilities are not listed in that group. Option b is incorrect because these are the acceptable data sources for diagnoses, which plan sponsors must check; they are not the organizations carrying the sponsor responsibility. Option d is incorrect because physicians and hospital outpatient facilities supply diagnosis data, and plan sponsors determine provider type from that data, so mixing them into the sponsor group is wrong.

Correct Answer: The Secretary, in consultation with States

The statute directs the Secretary, in consultation with States, to establish the criteria and methods used for risk adjustment activities. The Secretary may use criteria and methods similar to those under Medicare Part C or D. Option b is incorrect because the statute gives the task of establishing criteria and methods to the Secretary, not to States acting alone, and names States as the consulted parties. Option c is incorrect because Medicare Advantage organizations have no consulting role here; Medicare Parts C and D only supply a model the Secretary may draw on. Option d is incorrect because the Secretary does set the criteria and methods, but the statute directs consultation with States, and issuers are not named as the consulted party.

Correct Answer: Federal certification

Section 153.320(a) requires any risk adjustment methodology used by a State, or HHS on behalf of the State, to be a Federally certified risk adjustment methodology, which makes federal certification the governing requirement. Option a is incorrect because audit results belong in the summary a State submits to obtain re-approval after the third benefit year, which is separate from methodology approval. Option b is incorrect because this is a re-approval submission that a State must make public; it describes how operations went and does not set a requirement for the methodology itself. Option d is incorrect because it is a first-benefit-year reporting duty, covering the first 10 months of operations by December 31, and does not govern which methodology may be used.

Correct Answer: Each State

Under the ACA risk adjustment statute, each State provides a payment to health plans and health insurance issuers with high actuarial risk, using the criteria and methods developed under the statute's subsection (b). Option a is incorrect because the statute makes them the subject of a charge assessed by the State, and it does not give them the role of providing payments. Option b is incorrect because they are among the parties that receive the payment under the statute, so they sit on the receiving side. Option c is incorrect because they fall under the Employee Retirement Income Security Act and are left out of the State average actuarial risk comparison, so they are not the payer.

Correct Answer: Grandfathered health plan

The scope subsection of the statute applies to plans and issuers providing coverage in the individual or small group market within the State, and states that it does not apply to a grandfathered health plan or its issuer. Option a is incorrect because coverage in the individual market falls within the scope of the program, so its issuers are described in the scope subsection. Option b is incorrect because the statute names small group market coverage within the State as part of the scope, so these plans are included rather than excluded. Option d is incorrect because issuers are covered when they provide individual or small group coverage; being an issuer alone does not remove a plan from scope.

Correct Answer: HHS-specified Federally certified methodology set through notice-and-comment rulemaking

Under 45 CFR 153.320(c), HHS specifies in notice-and-comment rulemaking, in advance of the applicable benefit year, the Federally certified risk adjustment methodology that applies in States that do not operate a risk adjustment program. Option a is incorrect because alternate methodologies are submitted by a State that operates a program and must be reviewed and certified by HHS, not by a State regulator. Option c is incorrect because HHS must specify the applicable methodology in advance of the benefit year, so a methodology adopted afterward would not satisfy the timing requirement. Option d is incorrect because the rule gives no role to issuers in choosing a methodology; HHS specifies the Federally certified methodology that applies where a State has no program.

Correct Answer: Assigning enrollees to the small group risk pool

Assigning enrollees to the applicable risk pool belongs to the small group market provision, which ties assignment to the State where the employer's policy was filed and approved. It is not part of the data validation standards. Option a is incorrect because the general requirement obliges the State, or HHS on its behalf, to validate such a sample from each issuer offering at least one risk adjustment covered plan. Option b is incorrect because the data validation standards state this directly as part of the general requirement placed on the State, or HHS acting for it. Option d is incorrect because the standards require an appeals process for findings on software implementation or data validation, and the State or HHS must supply it.