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NBER Working Papers and Publications
|September 2017||The Impact of Partial-Year Enrollment on the Accuracy of Risk Adjustment Systems: A Framework and Evidence|
with Keith Marzilli Ericson, Kimberley Geissler: w23765
Accurate risk adjustment facilitates healthcare market competition. Risk adjustment typically aims to predict annual costs of individuals enrolled in an insurance plan for a full year. However, partial-year enrollment is common and poses a challenge to risk adjustment, since diagnoses are observed with lower probability when individual is observed for a shorter time. Due to missed diagnoses, risk adjustment systems will underpay for partial-year enrollees, as compared to full-year enrollees with similar underlying health status and usage patterns. We derive a new adjustment for partial-year enrollment in which payments are scaled up for partial-year enrollees’ observed diagnoses, which improves upon existing methods. We simulate the role of missed diagnoses using a sample of commercially i...
Published: Keith M. Marzilli Ericson & Kimberley H. Geissler & Benjamin Lubin, 2018. "The Impact of Partial-Year Enrollment on the Accuracy of Risk-Adjustment Systems: A Framework and Evidence," American Journal of Health Economics, vol 4(4), pages 454-00000. citation courtesy of