Modernizing Risk Adjustment in Health Care: A Position Paper of the American College of Physicians

Abstract

Risk adjustment is a critical component of health care reimbursement aimed at ensuring fair compensation on the basis of the characteristics of patients receiving care. Optimizing risk adjustment is not just a matter of improving efficiency or predictive accuracy; it is a crucial step toward achieving health equity by ensuring that resources are directed toward patients who need them most and reducing incentives to exclude or neglect high-risk patients. The authors reviewed available publications from PubMed and Google Scholar published between 2000 and 2025, as well as relevant news articles, policy documents, websites, and other sources related to risk adjustment and application areas. This process yielded 8 recommendations related to standardizing risk adjustment methods, promoting data interoperability, implementing strategies to enable more accurate and continuous reflections of patients' health status, integrating valid and reliable metrics into regular evaluation and feedback mechanisms, limiting "gaming" opportunities and incentives, creating valid ways to measure costs of caring for patients who are experiencing health care disparities and inequities and/or are disproportionately affected by social drivers of health, evaluating and leveraging advanced analytics and machine learning when able to improve risk adjustment models, and promoting research and implementation methods that combine elements of both prospective and concurrent risk adjustment. Implementation of these risk adjustment recommendations has broad implications for various entities in the health care ecosystem.