Traditionally, commercial health plans have had to monitor a small number of key activities in order to ensure satisfactory financial performance. These include such factors as underwriting, provider reimbursement contracting, and medical management. When the major provisions of the Patient Protection and Affordable Care Act (ACA) go into effect in 2014, there will be another powerful metric that plans will need to manage: risk score. The risk adjustment mechanism implemented by the ACA will likely have a material impact on the financial results of many insurance companies, it exposes carriers to new types of risks, and in some cases it can turn once-viable business strategies upside down. This article outlines the issues that plans will need to consider going forward in order to manage the risk adjuster. 

Originally published in Health Watch, October 2013.