In risk adjustment, which statements are true?

• A. Accounts for patient population health status
• B. Prevents cherry-picking healthy patients
• C. Essential for fair provider compensation
• D. All of the above

Answer: (D)

Risk adjustment is about aligning payments with patient needs by estimating expected costs based on health status. It accounts for patient population health status by using health conditions and other factors to adjust payments so sicker patients drive higher reimbursement, reflecting the greater care they require. This mechanism also prevents cherry-picking healthy patients, because payments are tied to the risk profile rather than the enrollment mix, reducing incentives to enroll only low-risk individuals. In turn, it ensures fair provider compensation by rewarding care that matches the complexity and needs of the patient mix, rather than just the volume of services delivered. Taken together, these aspects show why all of the above statements are true.