As the complexity of patient populations increases, healthcare companies face financial strain. One essential technique for estimating expenses and computing reimbursements is risk adjustment, which considers the health of the patient. Organizations mastering this approach gain financial stability while delivering better patient care. Risk Adjustment compares healthcare organizations fairly by factoring in patient complexity. Organizations serving sicker populations appear inefficient and face financial penalties without proper adjustment, despite providing appropriate care. The process uses diagnosis codes and demographic data to predict expected costs for each patient.

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