Risk Adjustment Technical Guidance Final Report - Phase 2 

The National Quality Forum (NQF) endorses performance measures that are intended for use in both performance improvement and accountability applications. Measures that assess performance of health outcomes are risk-adjusted to ensure the measure score is affected as little as possible by factors other than quality of care. However, quality measurement stakeholders have lacked guidance on how and when to adjust for social and functional status-related risk factors in outcome and cost/resource use measures. To address this knowledge gap, the Centers for Medicare & Medicaid Services (CMS) partnered with NQF to develop Technical Guidance for a standard risk adjustment framework that reflects best practices for, and addresses methodological trade-offs of, risk adjusting social and/or functional risk factors within quality measurement. This document presents the result of a two-and-a-half-year effort and will facilitate a consistent and more widely accepted approach to risk adjustment of social and functional risk factors. In the base period, NQF developed the Technical Guidance through an environmental scan and input from a Technical Expert Panel (TEP) and the public. In the option period, NQF garnered broader stakeholder feedback on the Technical Guidance through a series of multistakeholder focus groups. The Technical Guidance articulates core principles for risk adjustment, a five-step process for developing and testing risk adjustment models, and a cohesive framework of seven best practice standards that, at a minimum, developers must consider. The updated Technical Guidance supports the development of fair, unbiased quality measures that can drive healthcare quality improvements and reduce disparities in health and healthcare.