What Is a Risk Adjustment Factor Score?

A Risk Adjustment Factor (RAF) score is the calculation of a patient’s health status as a number–or risk score–that helps predict costs for healthcare services. Health plans will adjust the risk incurred from insuring individuals with expected higher healthcare costs by insuring members with expected lower healthcare costs. 

The RAF scoring model is used by the Centers for Medicare and Medicaid Services (CMS) to estimate the health status and associated costs of Medicare Advantage (MA) beneficiaries. For insurers and providers, it’s important to leverage data to achieve accurate RAF scores for members.


A RAF score is the actual weight applied to a county benchmark rate in order to generate the monthly capitation rate paid to a health plan. These scores are calculated using:

  • Demographic factors (such as age and gender)
  • Health status (including status post)
  • Use of Medicare services

Accurate RAF score calculations require support tools that can increase administrative efficiency, such as automated data extraction and organization, and improved communication between the payer and provider systems. This typically includes an established organizational system that includes all stages in the data collection process.


What Does RAF Mean for Healthcare?

RAF scores allows healthcare payers to balance healthcare costs across the entirety of their members. It ensures payers can provide sufficient access to care and coverage for all of their plan members.

CMS’ RAF model uses the Hierarchical Condition Category (HCC) method to conduct its calculations for beneficiaries. An HCC is a grouping of clinically related diagnosis codes with similar associated cost to the healthcare system; however, some health risk assessments may not be predictive of ongoing expenses, but ones that factor in severe acute diseases and chronic conditions can be indicative of a continuing financial burden to the healthcare system.


What Is a Good RAF Score?

Each RAF score depends on your organization’s coding system. According to the American Academy of Family Physicians (AAFP), a score of 1.00 is average. Decimal places represent the percentages above or below average in this score. For example, if a plan’s average patient RAF score is 1.25, it will receive 25% more from Medicare.

Higher scores can trigger referrals for case management in an accountable care organization (ACO) or help identify candidates for chronic care management services, which can result in higher quality of care for patients. 


Why RAF Scores Matter for Providers

Your practice’s RAF score can impact your compensation now and in the future. Health plans can pass on their losses or gains to you in one of three ways.


  1. The health plan requires you to fill out a form that is specifically designed to enhance the patient’s RAF score. These forms can be tedious but the plan will pay you and your practice to complete these forms.
  2. The health plan pays capitation as a percentage of premium and then adjusts the per-patient capitation amounts upward or downward as the RAF score changes.
  3. The overall RAF scores adjust the cost benchmarks in a shared savings arrangement; patients with higher RAF scores will have care that costs more. If your shared savings arrangement’s cost benchmark reflects that, your practice is more likely to earn shared savings.


In Closing

Calculating your HCC risk adjustment and RAF scores can be difficult to manage alongside your full caseload. Luckily, Inferscience offers streamlined, cutting-edge HCC risk adjustment and data extraction software specifically for physician groups, health systems, and payers.

Our software, Ubiquity, can integrate with any web-based electronic health record (EHR) and can show analysis insights to providers within the patient’s chart. For more information or to schedule your demo, contact us today at!



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