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Why Should Pediatricians Be Concerned About Risk Adjustment?

      Should clinicians receive the same reimbursement for treating an upper respiratory infection in a child with cystic fibrosis as for an upper respiratory infection in an otherwise well child? In a fee-for-service system, pediatricians have the opportunity to adjust reimbursement for individual patients or encounters using evaluation and management (E & M) codes. Capitation arrangements, where providers are paid a fixed amount to care for individuals, take into account the overall costs of a group of patients to calculate a per-patient capitation rate. But some providers care for groups with higher illness burdens, for example, a high proportion of children with disability or adolescents with AIDS. The separation of relatively well and relatively ill populations into different risk pools, a process referred to as selection, clearly occurs.
      • Scanlon DP
      • Chernow M
      • Lave JR
      Consumer health plan choice: current knowledge and future directions.
      • West DW
      • Stuart ME
      • Duggan AK
      • DeAngelis CD
      Evidence for selective health maintenance organization enrollment among children and adolescents covered by Medicaid.
      • Tollen L
      • Rothman M
      Case study: Colorado Medicaid HMO Risk Adjustment.
      Should these providers with sicker patients receive higher per-patient reimbursement than providers who care for healthier populations? Risk adjustment provides a method for calculating adjusted payment levels for populations with different health characteristics.
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      REFERENCES

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        • Chernow M
        • Lave JR
        Consumer health plan choice: current knowledge and future directions.
        Annu Rev Public Health. 1997; 18: 507-528
        • West DW
        • Stuart ME
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        • DeAngelis CD
        Evidence for selective health maintenance organization enrollment among children and adolescents covered by Medicaid.
        Arch Pediatr Adolesc Med. 1996; 150: 503-507
        • Tollen L
        • Rothman M
        Case study: Colorado Medicaid HMO Risk Adjustment.
        Inquiry. 1998; 35: 154-170
      1. Hwang et al. Comparison of risk adjusters for medicaid-enrolled children with and without chronic health conditions. Ambulatory Pediatrics 1:217-224

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