The U.S. Department of Health and Human Services established risk adjustment data validation (RADV) as a mechanism to protect risk adjustment integrity by assessing certain data elements supporting risk transfers. Issuers in the individual and small group insurance markets seemed to be optimistic heading into the 2017 audit following the prior years’ RADV pilots. While most achieved a 0% error rate, many still experienced unfavorable 2018 risk adjustment transfers. In this paper, Milliman’s Cameron Gleed, Jason Karcher, and Jason Petroske discuss what happened.
Since the inception of the Patient Protection and Affordable Care Act (ACA), the U.S. Department of Health and Human Services (HHS) realized a validation process would be needed to “ensure the accuracy and consistency of the data” underlying risk adjustment. In August 2019, HHS released the results of the first issuer-level ACA risk adjustment data validation (RADV) audit. Many in the market are digesting what happened and what it could mean for their businesses. Milliman’s Cameron Gleed, Jason Karcher, and Jason Petroske break down the purpose and technical details of ACA RADV in this paper.