WASHINGTONMedicare will phase in a new payment method for
managed care groups, known as risk adjustment, over the first 5 years
of the new century. The payment plan, required under the Balanced
Budget Act of 1997, is intended to encourage managed care
organizations to enroll the sickest Medicare beneficiaries.
The Health Care Financing Administration (HCFA) said that risk
adjustment looks at a patients diagnosis in 1 year and predicts
how much additional cost there will be in the following year. HCFA
said risk adjustment will increase payments to plans that care for
the sickest beneficiaries.