Medicare Calibration of the Clinically Detailed Risk Information System for Cost

Published in: Health Care Financing Review, v. 25, no. 1, Fall 2003, p. 37-54

Posted on RAND.org on January 01, 2003

by Kanika Kapur, Chien-Wen Tseng, Afshin Rastegar, Grace M. Carter, Emmett B. Keeler

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The clinically detailed risk information System for cost (CD-RISC) contains definitions for several hundred severity-adjusted conditions that can be used to predict future health care costs. The authors develop a prospective Medicare CD-RISC model using a 5-percent sample of Medicare beneficiaries and data that contain 1996 diagnostic information and 1997 annualized costs. The CD-RISC model has a hierarchical structure that implies that only the most expensive condition-severity variable within a body system affects payments. This minimizes incentives to game the system by entering multiple related codes for the same condition. The R 2 for the CD-RISC model is 11 percent.

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