Value-based care 101

The vocabulary of risk, defined simply.

New to capitation and risk adjustment? These are the terms you will hear, in plain language.

Attribution: The process of assigning a health-plan member to a specific practice or network for accountability and payment.
Capitation: A fixed monthly payment per attributed member, in place of billing for each individual service.
CDI: Clinical documentation integrity: making the medical record complete and accurate so it reflects the care actually delivered.
HCC: Hierarchical condition category: groupings of diagnoses used to estimate the expected cost of caring for a member.
HEDIS: A widely used set of quality measures that track how well preventive and chronic care is delivered.
IPA: Independent practice association: an organization that contracts independent practices into shared arrangements with health plans.
MLR: Medical loss ratio: the share of premium spent on medical care; central to how surplus is calculated.
PMPM: Per member per month: the standard way capitation and many healthcare costs are expressed.
RADV: Risk adjustment data validation: an audit that checks whether the medical record supports the conditions that were coded.
RAF: Risk adjustment factor: a score summarizing a member's expected cost based on documented conditions.
Shared surplus: The savings created when care is managed below budget, shared between the network and its providers.
Stars: A star rating program that scores plan and provider quality; higher ratings can mean better outcomes and economics.
Value-based care: Care paid for by outcomes and total cost rather than by volume of services.