RAF Score: Risk Adjustment Factor

What is a RAF Score?

The Risk Adjustment Factor (RAF) score is a multiplier derived from the CMS Hierarchical Condition Category (HCC) model that represents a patient's expected healthcare cost relative to the national average Medicare beneficiary. A RAF score of 1.0 means the patient is expected to have average Medicare costs. A RAF score of 1.5 means the patient is expected to cost 50% more than average. CMS uses the RAF score to risk-adjust capitation payments to Medicare Advantage plans: Base Payment Rate × RAF Score = Monthly Per-Member Payment.

RAF Score Components

A patient's RAF score is built from two types of factors:

• Demographic factors: Age and sex (which account for a base portion of the RAF for all beneficiaries), Medicaid dual-eligible status (adds significantly to RAF, reflecting the higher expected costs of low-income beneficiaries), institutional status, and new enrollee status.
• HCC factors: Each HCC category (representing a specific chronic disease or condition) that the patient has been coded with adds an incremental factor to the RAF. HCC factor values range from approximately 0.05 (minor conditions) to 1.5+ (severe conditions like major organ failure, HIV/AIDS with complications).

RAF Score Benchmarks

• National average RAF: Approximately 1.0 for the average Medicare Advantage member
• Healthy, young Medicare beneficiary: RAF ~0.3–0.5
• Average primary care panel (Medicare): RAF ~1.0–1.3
• Complex chronic disease patients: RAF ~2.0–3.0
• Highest-acuity patients: RAF 4.0+ (multiple severe chronic conditions)

Documentation Specificity Drives RAF

The same underlying clinical condition can generate very different RAF scores depending on ICD-10 code specificity. A patient with diabetes documented only as "Type 2 diabetes mellitus, unspecified" (E11.9 — not an HCC-qualifying code) generates no HCC contribution. The same patient with "Type 2 diabetes mellitus with diabetic chronic kidney disease, stage 3a" (E11.6522 — maps to HCC 18 and CKD HCC 138) generates substantial RAF contribution from both HCCs. Documentation specificity — not documentation volume — is the key driver of appropriate RAF scores.

Annual vs Retrospective HCC Capture

HCC coding for RAF score purposes requires the condition to be documented and coded in a qualifying encounter each calendar year. Retrospective chart reviews (reviewing prior year charts to capture missed HCCs) can supplement prospective coding but are less efficient and more auditable. Prospective HCC capture — ensuring all active chronic conditions are coded at every qualifying encounter — is the most sustainable and audit-safe approach to maintaining appropriate RAF scores.