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Risk Adjustment and Clinical Decision-Making

Date: 09/04/25

Accurate and comprehensive medical record documentation is a critical tool for informed clinical decision-making and effective risk adjustment. 

Risk adjustment models rely on hierarchical condition categories (HCCs) to predict future healthcare costs. Documentation deficiencies and inaccurate coding can potentially lead to underfunding and inadequate care planning.

Medical records serve as the primary source of truth for a patient’s health status. They inform treatment decisions, support continuity of care, and ensure that healthcare services are reimbursed according to the complexity of care delivered. In the context of risk adjustment, documentation directly impacts how patient risk is assessed and how resources are allocated.

To support both clinical accuracy and risk adjustment compliance, providers should focus on the following best practices:

  1. Document to the Highest Level of Specificity
    • Use the most specific ICD-10 codes available. Vague or generalized diagnoses can lead to under-coding, which misrepresents patient complexity and affects reimbursement.
  2. Link Diagnoses to Clinical Decisions
    • Every diagnosis should be tied to a treatment plan, medication, or monitoring strategy. This demonstrates that the condition is being actively managed and is not merely historical.
  3. Capture Chronic Conditions Annually
    • Even if a chronic condition is stable, it must be documented each year to be included in risk adjustment calculations. This includes conditions like diabetes, COPD, and hypertension.
  4. Ensure Real-Time, Legible Entries
    • Timely documentation reduces errors and ensures that all relevant clinical details are captured. Illegible or incomplete records can lead to claim denials or audits.
  5. Support Medical Necessity
    • Clearly justify why services were rendered. This includes documenting symptoms, test results, and clinical rationale for treatments or referrals.

Accurate documentation is about telling the full story of the patient’s health. It empowers providers to make better decisions, leading to better patient outcomes.