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A Big Change to Medicare Risk Adjustment: Incorporating Social Determinants of Health

Will SDoH reshape Medicare risk adjustment?

For decades, the Centers for Medicare & Medicaid Services (CMS) has recognized that appropriate payment to Medicare Advantage (MA) plans needs to be based on the best available information. In the 1990s, CMS implemented a payment differential for members who are dually eligible for Medicare and Medicaid. This payment reflected the increased cost CMS associated with lower income members who had historically lower access to care. This was Social Determinants of Health (SDoH) years before the term became popular. Today with a focus on value-based care, there is a growing push to broaden the acknowledged impact of SDoH barriers throughout the healthcare system.

At BeneLynk, we believe more information will allow the government to better align Medicare Advantage plan payments and risk. So it was exciting to read the recent article in the New England Journal of Medicine, titled “Clinical and Social Risk Adjustment – Reconsidering Distinctions.” The article was co-written by Dr. Shantanu Agrawal, CEO of the National Quality Forum and Dr. William Shrank, Humana’s Chief Medical Officer.

From the article:

“We believe it is time for a meaningful reconsideration of the goal of, and approach to, risk adjustment writ large in quality measurement and payment systems. The discussion should no longer be about the dichotomy of clinical risk versus social risk. If our goal is to align payment with the outcomes we hope to produce, we should acknowledge the interdependence of social, behavioral, and physical domains in constituting risk and producing better health.”

In our work, we see the impact of SDoH barriers every day — whether it is in our services to dual eligible members, or senior veterans, or any Medicare Advantage member experiencing challenges that transcend traditional healthcare. And it is not just low-income SDoH barriers that matter — there is a growing understanding that factors such as social isolation (which can affect all income strata) can have adverse impacts on members’ health. These barriers substantially affect members’ ability to live their healthiest lives and it makes sense to integrate this reality into risk adjusted payments.

If SDoH is going to become a substantial driver of risk adjustment, MA plans will need a systematic approach to documenting SDoH barriers. Last year, I wrote about the forward-thinking ICD-10 enhancements proposed by the American Medical Association and UnitedHealthcare. The goal of integrating SDoH into risk adjustment is not just to recognize the different costs associated with members who have barriers, but to encourage efforts to improve health. Medicare Advantage plans need to empower their members with the tools they need to improve healthy living. The first step is to systematically document the SDoH barriers within the population to allow measurement to inform management.

At BeneLynk we document SDoH barriers for our Medicare Advantage members using ICD-10 codes as part of our effort to “lead with help.” In all our phone conversations we want to start by meeting the member where they are and offering the help that they need. We document SDoH barriers and work with the member to identify benefit programs that can address the challenge.

We’re excited to see Humana and other Medicare payers thinking about the Social Determinants of Health and looking to how the industry can best address the whole member. We support the thesis that Social Determinants of Health should be integrated into risk adjustment to encourage Medicare Advantage plans to pursue all avenues to help members live their healthiest lives.

About the Author

Sean Libby has been an advocate for seniors, people with disabilities, veterans, and individuals with low income for over 18 years. At BeneLynk, we are committed to helping managed care plans to deliver superior Social Determinant of Health solutions to their members. We are always looking to learn more and would like to hear your ideas on how best to assist members in need. Drop us a note at

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