GHDP-125-19: Ch. 22.6-22.7 of Healthcare Risk Adjustment and Predictive Modeling, Duncan, 2nd Edition

Use this thread to discuss ANYTHING and EVERYTHING related to this syllabus reading.
Some possible questions include:

  • How can this reading be tested?
  • I don’t understand a specific topic/formula - Can we discuss this?
  • This reading gives me nightmares. Can we talk through it a bit?

Good luck!

I’m confused about the adjusted benchmark.

  1. MATE says C’PY1 = C0 * RPY1 / RB3. This implies the adjusted benchmark ignores any risk shifts that occurred from benchmark year 1 to benchmark year 2 and from benchmark year 2 to benchmark year 3. That seems weird though. Am I understanding that right?

  2. MATE says it adds in the absolute increase in National Parts A and B PMPY. Is this only to go from benchmark year 3 to the performance year? That seems to be the only thing that would make sense since the initial benchmark already trends everything to benchmark year 3. Is my assumption right or am I misunderstanding something?

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For your first question, the initial benchmark (C0) should already account for the trend & risk changes from BY1 to BY3. The RPY1 / RB3 piece is then adjusting C0 further for any changes in risk from BY3 to PY1.

I think you are right about your second question. At least that is how I am understanding it.

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Thanks! I don’t know why I was thinking C0 didn’t contain any risk shifts. I now see the formula for C0 has them.

When updating the benchmark year cost to the first performance year claim cost, why is C(PY1) is not considering the trend from B3 to PY1, but only considering change in risk (RPY1/RB3)?

I believe the absolute increase in National Parts A & B PMPY would be added to the C’PY1 to account for trend, which is what @OldTimer was referring to in the second part of his original question.

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Thank you, I missed that