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Artificial intelligence (AI) is no longer a future consideration for health plans. AI-powered tools are already reshaping how organizations operate, how members seek information, and how leaders are making decisions across clinical and administrative workflows.

Recent increases in regulatory scrutiny signal a clear shift in AI adoption, from a phase of experimentation into a more structured, accountable environment. For health plan leaders, this moment is less about whether to adopt AI and more about how to do so responsibly—balancing innovation with patient safety, transparency, and AI governance.

The 2026 HealthEdge® Payer Survey shows that 94% of health plans are already live with or actively adopting AI, yet only 31% report having fully defined governance models and controls.

Healthcare AI Regulation Is Accelerating at the State Level

California has emerged as an early trailblazer when it comes to regulating AI tools in healthcare, demonstrating where wider-reaching compliance could be headed.

The recent Assembly Bill 489, supported by the California Medical Association, aims to protect patients from misleading information delivered by healthcare chatbots. New requirements help ensure these AI-powered tools are deployed in ways that protect patient safety and help maintain trust in healthcare providers and payers.

One of the primary concerns behind this legislation is that AI systems, especially those that consumers interact with directly, can present information in a way that members perceive as authoritative, but may lack proper context.

The new Assembly Bill builds on earlier requirements, such as Assembly Bill 3030, which mandates disclosure when generative AI is used in clinical communications and ensures patients have access to human providers.

At a national level, activity is accelerating. The National Conference of State Legislatures (NCSL) reports that all 50 states introduced AI-related legislation in 2025, with healthcare among the primary areas of focus.

The signals are clear: health plan AI strategies must now account for regulatory oversight, auditability, and compliance from the outset.

Why Ethical AI Matters for Health Plans Now

For health plans, the implications extend well beyond compliance. AI is increasingly shaping how members:

• Search for health information
• Interpret symptoms and treatment options
• Form perceptions about their health plan experience

At the same time, health plan AI applications are expanding across claims processing, care management, and payment integrity workflows. This creates a dual responsibility. Health plans must ensure that:

• AI-driven member interactions are accurate, transparent, and clinically appropriate
• Operational AI supports compliant and auditable decision-making
• Clinical and administrative workflows remain aligned

Without the right controls in place, AI in healthcare introduces new risks, particularly when outputs are generated without sufficient clinical context or oversight.

Preparing for What’s Next in Healthcare AI

As expectations evolve, ethical AI in healthcare is becoming an operational requirement. Three principles are emerging as foundational to responsible AI adoption:

1. Transparency in AI

Members and providers must understand when AI is being used and how it influences outcomes. This is central to both trust and regulatory compliance.

2. Patient Safety in AI-Driven Healthcare

AI outputs must be grounded in clinically appropriate, validated information. Inaccurate or incomplete guidance can introduce downstream clinical and operational risk.

3. AI Governance in Healthcare

Health plans must be able to explain how AI systems function, how decisions are made, and how performance is monitored over time. This includes data governance, model oversight, and auditability.

These principles define what responsible, scalable AI in healthcare looks like in practice.

Preparing Health Plan AI Strategies for What Comes Next

The regulatory environment surrounding AI in healthcare will continue to evolve. Requirements will become more specific, enforcement will increase, and expectations around accountability will grow.

Health plans that take a reactive approach may find themselves continuously adjusting. Those that embed AI governance, transparency, and clinical alignment into their strategy early will be better positioned to scale.

This includes asking the right questions of technology partners:

• How is AI governed across the platform?
• How are outputs validated and monitored?
• How does the solution support healthcare AI compliance and auditability?
• How are clinical and operational workflows connected?

A More Sustainable Approach to AI in Healthcare

The future of AI in healthcare will be defined by trust.

Health plans need solutions that balance innovation with accountability, connecting data, workflows, and governance to support both operational performance and regulatory expectations.

At HealthEdge, this approach is grounded in a clear commitment to ethical AI development. This includes a focus on transparency, regulatory alignment, and embedded governance, ensuring that AI capabilities are designed to operate safely within healthcare environments from day one.

As AI continues to evolve, the organizations that succeed will be those that treat it not as a standalone capability but as part of a broader, connected model that can be trusted by members, providers, and regulators alike.

Learn more about how your health plan can leverage integrated AI to improve clinical outcomes and enhance operational efficiency. Read the data sheet.

Shifts in healthcare regulations continually push health plans to adjust their strategies. The Centers for Medicare & Medicaid Services (CMS) introduced sweeping mandates that fundamentally shift how health plans handle clinical documentation. Adjusting to these concurrent regulatory changes requires attention to detail and access to real-time data.

Here, we break down the strategic integration of two major rules: the Health Care Claims Attachments Transactions and Electronic Signatures Final Rule (CMS-0053-F) and the Interoperability and Prior Authorization Final Rule (CMS-0057-F).

By understanding these complex mandates, health plan leaders can proactively manage population health, reduce administrative waste, and achieve regulatory excellence. In this article, we explore the technical requirements of both rules, outline the projected operational benefits, and provide actionable strategies to align your compliance architecture.

Interoperability Drives New Regulations

The two major goals driving the new CMS regulations are to reduce administrative burden and improve health information exchange. These dual mandates represent a coordinated effort to transition from traditional manual workflows to a fully digital-first, automated ecosystem that puts members at the center.

By standardizing electronic attachments and prior authorizations, CMS aims to help eliminate friction between payers and providers. Health plans that embrace this vision will not only comply with federal mandates but also have a better opportunity to optimize cost management, accelerate claims processing, and ultimately deliver a superior member experience. Structured data exchange lays the groundwork for predictive analytics, empowering plans to deploy proactive health management strategies that improve long-term member health outcomes.

CMS-0053-F: Modernizing Claims Attachments

The CMS-0053-F rule targets a longstanding gap in healthcare administration: no federal standard for electronically transmitting clinical documentation for adjudication. This groundbreaking rule establishes the first-ever HIPAA-adopted standards for supporting clinical documentation.

To achieve compliance by the May 26, 2028 deadline, health plans must modernize their administrative systems and data integration capabilities.

Leveraging X12 and HL7 Standards Together

Historically, health care providers relied on manual methods like faxing or physical mail to submit any additional documentation required by health plans. Under CMS-0053-F, health plans must implement both X12 and Health Level 7 (HL7) standards to facilitate secure, efficient electronic data exchanges.

Specifically, this rule requires the adoption of Version 6020 of the X12N 275 and X12N 277 standards. Crucially, the final rule also adopts HL7 Consolidated Clinical Document Architecture (C-CDA) Implementation Guides (IGs) alongside the X12 standards. Health plans must support the HL7 C-CDA IG Volume One, Volume Two, and the HL7 Attachments IG. By integrating these precise standards, health plans create a single source of truth for both structured clinical content and unstructured documents.

Unlocking Operational and Financial Benefits

Eliminating manual claims attachment processes can deliver profound financial and operational returns. CMS projects that these updates will generate roughly $781 million in annual savings across the healthcare industry.

Beyond optimized cost management, standardizing these transactions enables faster care delivery and accelerates claims processing. The rule also establishes rigorous electronic signature requirements, ensuring that all health care claims attachment transactions are secure, authenticated, and compliant with federal security standards.

CMS-0057-F: Revolutionizing Prior Authorization

While CMS-0053-F focuses strictly on claims adjudication, the CMS-0057-F rule addresses the administrative friction inherent in the prior authorization process. Applying to Medicare Advantage, Medicaid managed care, Children’s Health Insurance Program (CHIP), and Qualified Health Plan (QHP) issuers, this mandate shifts prior authorization workflows into real-time, point-of-care transactions.

Health plans must implement native Fast Healthcare Interoperability Resources (FHIR)-based Application Programming Interfaces (APIs) built on Da Vinci implementation guides. The required APIs include Coverage Requirements Discovery (CRD), Documentation Templates and Rules (DTR), and Prior Authorization Support (PAS). Compliance with these specific API requirements is mandated by January 1, 2027.

NSG Enforcement Discretion

A critical nuance for health plans involves the regulatory flexibility provided by the National Standards Group (NSG) regarding CMS-0057-F. The NSG announced an enforcement discretion for HIPAA-covered entities that implement FHIR-based Prior Authorization APIs.

Specifically, the NSG will not take HIPAA Administrative Simplification enforcement action against entities that choose not to use the X12 278 standard, provided they utilize an all-FHIR-based electronic prior authorization process. This crucial enforcement discretion empowers health plans to innovate faster, build more cohesive API architectures, and avoid the friction of maintaining redundant transaction standards for the same workflow.

Streamlining Communication and Authorization

While CMS-0053-F and CMS-0057-F address different operational functions, they support each other at the infrastructure level. Both rules require health plans to exchange clinical documentation with providers in a uniform and accurate way, and both depend heavily on accurate and real-time data.

CMS is deliberately introducing advanced FHIR standards alongside established X12 and HL7 standards. This is the new operating environment for health plans. Attempting to treat these implementations as sequential projects instead of a concurrent integration are likely to face compliance risks and resource bottlenecks. Because CRD, DTR, and PAS require active deployment by January 2027, the implementation phases for both rules must occur simultaneously. This parallel processing a requires robust, flexible system architecture that facilitates seamless integration.

4 Actionable Implementation Strategies for Health Plans

Health plans must adopt a proactive, data-driven approach to abide by these regulations. These technical and operational strategies are our recommendations for maintaining compliance.

1. Accelerate FHIR API Readiness

January 1, 2027, represents an active implementation deadline, not a distant planning horizon. To mitigate risk, health plans must fund and initiate FHIR investments immediately. Vendor conformance testing against Da Vinci implementation guides and provider pilot programs must become fully operational. Early adoption of these data-driven solutions guarantees smoother integration and higher regulatory compliance scores.

2. Develop X12 and HL7 Capabilities in Parallel

While advancing FHIR APIs, plans must simultaneously upgrade their platform capabilities to support the updated X12 275 and HL7 C-CDA implementation guides natively. Technology infrastructure must be able to ingest, enrich, and process complex clinical content seamlessly. This capability enhancement runs alongside FHIR investments without displacing them, ensuring a comprehensive approach to documentation management.

3. Establish Unified Program Governance

Siloing CMS-0053-F and CMS-0057-F into distinct, isolated workstreams increases the risk of redundant efforts and operational blind spots. Health plans can avoid this by assigning a unified program governance structure to oversee both initiatives. This model helps ensure strict alignment on shared data assets, vendor commitments, and provider enablement strategies, enabling enhanced cost efficiency.

4. Demand Strict Vendor Conformance

Hold technology partners accountable to precise conformance standards rather than broad capability promises. Evaluate vendors based on their support for specific Da Vinci Implementation Guide versions, proven testing environments, and documented readiness for pilot programs. Ensure your partners provide seamless integration pathways that minimize disruption to existing core administrative processing systems.

Outperform Compliance Expectations with HealthEdge®

The pace of healthcare transformation will only accelerate. The simultaneous adoption of complex interoperability standards presents a formidable challenge, but it also offers a distinct opportunity for health plans to embrace innovation. By designing scalable, integrated platforms that natively support X12, HL7, and FHIR standards, health plans can dramatically reduce administrative waste and lower healthcare costs.

Start aligning your data infrastructure today to outperform compliance expectations, drive strategic cost management, and deliver unmatched value to your members.

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With the recently released the 2027 Medicare Advantage Final Rule and Rate Announcement, The Centers for Medicare and Medicaid Services (CMS) confirmed it is finalizing payment rates at a higher-than-anticipated average rate and that a suite of policy changes will take effect for contract year 2027.

For payers, the combined impact spans revenue, risk adjustment, Star Ratings, supplemental benefit administration, and marketing operations.

1. Payment Rates: Growth with Real Revenue Headwinds

The final National Per Capita Medicare Advantage (MA) Growth Percentage for calendar year (CY) 2027 is 4.40 percent—below the Fee-for-Service (FFS) Growth Percentage of 5.46 percent.  The change in growth rates from the CY 2027 Advance Notice to the CY 2027 Rate Announcement is due primarily to incorporation of additional data. The non-ESRD Fee For Service United States Per Capita Costs for Part A and Part B are based on claims experience with incurred dates through Q4 2025.

However, the headline growth number does not tell the full revenue story for health plans. CMS is finalizing two diagnosis source exclusions that will reduce risk scores—and therefore risk-adjusted payments—for plans that have relied on these coding sources:

1. Exclusion of diagnoses from unlinked chart review records (CRRs), with a narrow exception for beneficiaries switching between MA organizations, and
2. Exclusion of diagnoses coded from audio-only services (modifiers 93 and FQ).

Together, these changes are estimated to produce net Medicare Trust Fund savings in CY 2027 by reducing the pool of diagnoses eligible for risk adjustment. Plans with higher historical reliance on unlinked CRRs or audio-only encounter coding will see a proportionally greater impact on their risk scores and payment rates.

CMS is also maintaining the statutory minimum MA coding pattern difference adjustment of 5.90 percent, unchanged from CY 2026. Plans should model the combined effect of normalization factor updates (2024 CMS-HCC model normalization factor: 1.079) and diagnosis exclusions on their projected CY 2027 risk scores now that bid season has commenced.

Key Numbers:

• 4.40% Medicare Advantage Growth Percentage
• 5.46% Fee-for-Service Growth Percentage
• 5.90% coding pattern adjustment
• Normalization: 1.079 (2024 model)

2. Risk Adjustment Model: Continuity, not Recalibration

CMS is continuing the 2024 CMS Hierarchical Condition Category (HCC) risk adjustment model for non-PACE MA organizations—pulling back from the proposed recalibration to a 2027 model using 2023 diagnoses and 2024 expenditure data. Program of All-Inclusive Care for the Elderly (PACE) organizations will use a 50/50 blend of the 2024 and 2017 CMS-HCC models. While continuity reduces year-over-year volatility, plans should not interpret model stability as payment stability: the diagnosis exclusions and normalization factor updates will still move risk scores materially for many organizations.

CMS also finalized the exclusion of diagnoses from audio-only services for RxHCC models, and implemented updated RxHCC models reflecting IRA-driven Part D benefit restructuring, using 2023 diagnoses and 2024 expenditure data for non-PACE plans.

3. Star Ratings: Simplification Does Not Equal Reduced Accountability

CMS is finalizing a significant reduction of the Star Ratings measure set. The two Part C appeals measures—Plan Makes Timely Decisions about Appeals and Reviewing Appeals Decisions—will be removed beginning with the 2029 Star Ratings. The Call Center—Foreign Language Interpreter and TTY Availability measure is also being removed for both Part C and D.

CMS also decided not to proceed with the Health Equity Index (HEI) reward factor, retaining the existing historical reward factor in the methodology. The net 10-year Trust Fund impact of these Star Ratings changes is estimated at $18.56 billion (from 2027 to 2036).

Note: Health plans should not interpret appeals measure removal as reduced risk. CMS stated unequivocally that full compliance with 42 CFR Part 422 Subpart M remains mandatory, and CMS will use audits, corrective action plans, and public warning letters to enforce appeals processing performance. The financial incentive structure changes, but the compliance obligation does not.

4. Supplemental Benefits: Debit Card Guardrails Now Codified

CMS is codifying existing guidance on debit card administration of supplemental benefits, requiring that debit cards be electronically linked to plan-covered items and services through a real-time point-of-sale verification mechanism and restricting card use to the specific plan year. While use of debit cards to administer benefits remains voluntary, plans that use them must now comply with these codified standards, rather than abiding by informal guidance. Note that cards must also be restricted to the current plan year only, with no balance rollovers into a new plan year.

In addition, CMS is finalizing a new transparency requirement: health plans must publicly post their plan-developed Special Supplemental Benefits for the Chronically Ill (SSBCI) eligibility criteria on their public-facing website. This is a new operational compliance obligation for plans offering SSBCI. Notably, CMS did not finalize the proposed prohibition on marketing the dollar value of supplemental benefits, which is a significant pullback from the proposed rule.

5. Marketing and Agent/Broker Rules: Targeted Deregulation

In a notable deregulatory shift, CMS eliminated the 12-hour delay requirement between educational events and marketing events at the same location. Health plans and agents/brokers may now hold a marketing event directly following an educational event at the same location, provided attendees are notified of the transition and given sufficient opportunity to leave. This reverses the 2023 requirement and reduces compliance burden on plans and agents conducting community outreach.

CMS also modified Third Party Marketing Organization (TPMO) disclaimer requirements, adjusting the timing from “within the first minute of a sales call” to “prior to the discussion of any benefits,” and updated the disclaimer language to reflect the number of organizations and plans the TPMO represents. CMS also reduced the required retention period for call recordings from 10 years to 6 years. Plans that rely on TPMO distribution channels should review their call scripts, training materials, and recording retention policies for CY 2027 applicability, with marketing changes effective October 1, 2026.

The CY 2027 regulatory environment rewards payers with administrative systems that can adapt quickly, from risk adjustment data integrity to supplemental benefit configuration to member-facing disclosure requirements. HealthEdge’s integrated platform of solutions— including HealthRules® Payer, HealthEdge Source™, HealthEdge Provider Data Management, GuidingCare®, and Wellframe™—is purpose-built to support health plans in navigating these compounding, cross-functional changes with the speed and precision the regulatory calendar demands.

Learn more about how integrated HealthEdge solutions enable health plans to stay in line with shifting Medicare Advantage standards. Download our eBook: Navigating the New Medicare Advantage Reality—Why Member Engagement and the Right Platform Is Your Competitive Advantage.

About Bettina Vanover, CHC, CIPP/US

Bettina Vanover is the Regulatory Principal at HealthEdge. She joined the team in 2025, bringing more than 20 years of experience in the healthcare industry. Bettina earned her MBA in Business, Health Administration from the University of Colorado, and her BA in Health Policy & Administration from Penn State University. Follow Bettina on LinkedIn.

This year marked the 20th anniversary of the RISE National Conference, but the milestone felt less like a retrospective and more like a clear signal of where health plan risk adjustment is heading next.

Nothing about the operating environment has gotten easier. Medicare Advantage risk adjustment programs continue to operate under sustained pressure—from rising medical and pharmacy costs to expanding audit activity and new requirements from the Centers for Medicare and Medicaid Services (CMS). At the same time, health plans are working to improve risk adjustment documentation and coding, strengthen outcomes, and maintain financial performance.

And yet, the tone at RISE felt different this year.

The challenges payers face haven’t changed—but the industry’s response to them has.

From Waiting to Taking Action

Over the past several years, many healthcare organizations approached risk adjustment programs with caution, waiting for clearer regulatory signals or more predictable guidance. But now, the executive mindset has shifted.

At RISE, it was clear that health plans are no longer waiting. Conversations focused on prospective risk adjustment implementation, with programs like targeted pilots and practical improvements to coding workflows.

Health plan leaders are asking more direct questions about Hierarchical Condition of Categories (HCC) risk adjustment coding, audit defensibility, and how to ensure accuracy across both retrospective and concurrent processes. There is growing recognition that progress comes from operational discipline, consistent improvements in risk adjustment documentation and coding rather than large, one-time transformations.

Rising Regulatory Intensity Is Reshaping Risk Adjustment

Regulatory oversight has always been a central piece of health plan risk adjustment strategies. What has changed is the scale, speed, and intensity of that oversight.

Risk Adjustment Data Validation (RADV) audits are expanding in scope and frequency, with CMS continuing to refine its methodology and apply findings more broadly across Medicare risk adjustment programs.

At the same time, enforcement bodies are aligning on common standards for validation, documentation, and submission accuracy. The U.S. Department of Justice has continued to prioritize healthcare enforcement under the False Claims Act. In addition, the Office of Inspector General has also issued ongoing guidance and reports highlighting vulnerabilities in Medicare Advantage risk adjustment.

For health plans, this means that risk adjustment payment is more closely tied than ever to critical operations like:

• Accurate clinical documentation
• Defensible risk adjustment coding
• End-to-end traceability across submission workflows

The challenge is not understanding compliance. It is keeping pace with how quickly expectations are evolving.

A More Sophisticated Threat Landscape for Health Plans

Alongside regulatory pressure, the healthcare industry is facing a more complex fraud environment.

Discussions at RISE highlighted the emergence of AI-enabled fraud patterns, ranging from synthetic documentation to coordinated submission activity that can appear clinically valid. These developments are raising new questions about how risk adjustment programs detect and prevent fraud, waste, and abuse.

The Office of Inspector General has repeatedly emphasized program integrity risks and the need for stronger oversight. Traditional approaches to risk adjustment services, often reliant on static rules or isolated reviews, are becoming less effective. Health plans are increasingly looking for solutions that combine advanced analytics with clinical validation.

Re-centering on the Purpose of the Work

Amid conversations about audits, compliance, and financial pressures, one moment at RISE stood apart. In his keynote, NBA Hall of Fame player Dominique Wilkins shared his personal journey managing diabetes and his experience competing at the highest level of his sport. He spoke about discipline, proactive self-care, and the critical role of consistent support systems.

His story served as a powerful reminder that behind every diagnosis code and risk adjustment factor is a real person, someone whose quality of care depends on healthcare organizations getting it right. Whether in Medicaid risk adjustment, commercial risk adjustment, or Medicare Advantage, the goal is the same: to accurately reflect a member’s health status so they can receive the care they truly need.

What This Means for Health Plans & How HealthEdge® is Here to Help

The direction is clear. Risk adjustment programs must continue to evolve. Health plans are moving toward more connected approaches that bring together:

• Prospective and retrospective risk adjustment workflows
• Integrated risk adjustment documentation and coding processes
• Alignment between HEDIS and risk adjustment programs
• Greater visibility across Medicaid risk adjustment and commercial risk adjustment

HealthEdge Risk Adjustment solutions were designed to help health plans address these very challenges by delivering a comprehensive approach to risk adjustment, supporting the full lifecycle, from condition identification and provider engagement to coding, submission, and reconciliation.

Our solutions enable health plans to:

• Improve accuracy in HCC risk adjustment coding
• Strengthen audit readiness with traceable workflows
• Advance prospective risk adjustment strategies
• Reduce complexity across retrospective risk adjustment
• Improve visibility into risk adjustment payment drivers

The Work Ahead

If there was one takeaway from RISE 2026, it is this: the healthcare industry has moved forward when it comes to risk adjustment.

The challenges are not new, but the urgency is greater. The expectations are higher. And the willingness to act is stronger. Leading health plans are investing in solutions, refining operations, and strengthening their risk adjustment programs to meet the demands of today’s environment.

Learn how HealthEdge Risk Adjustment solutions can help your organization. Download the white paper: Getting Risk Adjustment Right – A Guide for Modern Health Plans.

Health plans with home and host capabilities have set the standard for healthcare excellence since 1929—but mounting industry pressures constantly challenge these market leaders.

Decreasing margins, evolving regulatory requirements, and the shift toward value-based care demand continuous innovation. To remain competitive and stay ahead of industry shifts, health plans need data-driven solutions that simplify administrative processes while driving strategic cost management.

Health plan leaders are turning to next-generation core administrative processing systems (CAPS) to overcome complex healthcare challenges. See how payers are leveraging the integrated HealthRules® Payer CAPS to improve home and host plans to improve operational efficiency, boost member satisfaction, and achieve regulatory excellence.

1. Navigating Complex Regulatory Compliance

Health plans that manage government programs face a constant stream of state and federal regulatory changes. Non-compliance can result in severe financial sanctions or operational disruptions. Core administration systems must enable rapid, reliable changes to underlying rules without requiring significant IT interventions.

HealthRules Payer provides payers with the agility necessary to maintain compliance across Medicare, Medicaid, and Dual-Eligible lines of business as regulations evolve. By leveraging proactive health management tools and producing auditable, highly accurate reporting, your organization can deliver high-quality care while controlling costs.

2. Driving Operational Efficiency and Automation

Manual claims processing drains crucial resources and increases the risk of costly errors. Efficiency cannot come at the expense of accuracy when you need to maintain positive relationships with providers and members. Home and host plans require a system that delivers accurate claims auto-adjudication across categories.

HealthRules Payer combines advanced automation with financial accuracy. One health plan leveraged the CAPS solution to increase claims auto-adjudication volume by 800%. Paired with a 98% configuration accuracy rate, this level of operational efficiency directly supports strategic cost management and reduces member and provider abrasion.

3. Adapting to New Business Models Swiftly

The healthcare market increasingly relies on complex value-based reimbursement models. Outdated legacy systems often struggle to accommodate these varied group and benefit packages. This limitation leads to slow, error-prone configurations that impede your market agility.

The patented, English-like HealthRules Language forms the backbone of the HealthRules Solution Suite. It offers unmatched flexibility for payers to define benefit plans and provider contracts quickly. Business analysts can perform configuration updates in hours instead of days or weeks. This technical flexibility allows users to seamlessly integrate new products and value-based care models without relying on programmers and IT teams.

4. Improving Member Satisfaction and Outcomes

Integrated data is vital for enabling efficient operations and building strong provider relationships. Legacy platforms frequently lack real-time data exchange capabilities, leading to fragmented care and delayed claim resolutions. Health plans require integrated ecosystems that deliver precise information to support care teams and improve overall member health.

Through robust integration layers like HealthRules Connector and the analytical power of HealthRules Answers, HealthEdge delivers seamless integration across your entire digital ecosystem. This single source of truth helps payers achieve up to a 90% first-call resolution rate. When customer service representatives have immediate access to accurate data, member satisfaction naturally rises.

Unlock the Full Potential of Your Health Plan

Thriving in the current healthcare landscape requires technology that acts as a catalyst for growth and resilience. By optimizing core administrative processes, you can significantly reduce manual work, lower administrative overhead, and unlock per member per month (PMPM) savings.

Ready to explore how the right core administrative processing system can transform your operations?

Discover detailed insights, performance metrics, and the proven ROI that HealthEdge delivers to industry-leading health plans. Download the brochure: How Plans With Home And Host Capabilities Lead In Value-Based Care.

 

Risk adjustment programs are entering a new phase of maturity. Historically, health plans approached Medicare Advantage risk adjustment retroactively, reviewing charts after encounters occurred, and identifying missed diagnoses later in the year.

Retrospective risk adjustment remains an important part of a health plan’s risk adjustment program. But regulatory and documentation guidelines are accelerating the shift toward proactive strategies that combine retrospective review with real-time documentation validation and prospective risk adjustment.

Risk Adjustment & Regulatory Pressures

The scale of risk adjustment is really why this shift matters. Medicare Advantage payments exceeded $450 billion in 2024, with risk scores playing a central role in determining payers’ risk adjustment payment levels. As a result, even small documentation gaps can translate into significant financial and compliance implications.

Recent policy changes and audit activity are reinforcing this trend. The expansion of the Risk Adjustment Data Validation (RADV) program from The Centers for Medicare and Medicaid Services (CMS) has increased pressure on participating organizations to ensure diagnoses are fully supported by documentation. Research from the Kaiser Family Foundation also showed that chart reviews play a significant role in payer risk adjustment operations, with more than 60% of Medicare Advantage members associated with at least one chart review in recent years.

Rather than waiting until year-end reviews to identify documentation gaps, payers are increasingly building programs that continuously monitor risk capture, provide earlier feedback to providers, and support documentation improvement throughout the care cycle.

While most industry attention focuses on Medicare Advantage, many organizations are applying similar strategies across Medicaid and commercial programs—where accurate documentation and coding also influence reimbursement, quality measurement, and program sustainability.

This shift is giving rise to a new operating model: real-time risk adjustment.

What Real-Time Risk Adjustment Means in Practice

Real-time risk adjustment does not replace retrospective chart reviews. Instead, it helps shorten the feedback loop by enabling health plans to identify documentation opportunities earlier, strengthen provider engagement, and maintain continuous visibility into risk capture performance.

In traditional retrospective models, coding teams and analytics groups often identify documentation gaps months after a patient visit occurs. By that point, the clinical context may be difficult to reconstruct, making follow-up more challenging for both providers and risk adjustment teams.

A real-time approach addresses this gap by introducing continuous monitoring across the health plan risk adjustment program. Clinical documentation patterns can be evaluated throughout the year, allowing teams to detect emerging trends earlier and take corrective action while the information is still relevant.

This also means that risk adjustment insights appear closer to the point of care. Coders can prioritize the most impactful charts for review, provider engagement teams can deliver targeted documentation guidance, and analytics teams can gain earlier visibility into how risk adjustment factors are evolving throughout the year.

The result is a program that operates continuously rather than episodically.

Technology That Enables Modern Risk Adjustment Documentation and Coding

The shift toward real-time operations is largely enabled by advances in analytics and clinical data integration.

5 Key capabilities for modernizing payer risk adjustment programs:

1. Live electronic health record (EHR) integrations that allow encounter data and clinical notes to flow directly into risk adjustment analytics environments
2. Natural language processing (NLP) tools that analyze clinical documentation and highlight potential diagnosis gaps or coding opportunities, as referenced in a recent Cornell University study
3. AI-assisted triage models that prioritize charts most likely to contain high-impact documentation opportunities
4. Clinical decision support tools that surface documentation prompts during provider encounters
5. Data and analytics platforms that consolidate encounter data, chart review activity, and risk score performance metrics

An important note: It is imperative for health plans to minimize overcoding. Payers can utilize OIG regulations and evaluate data to reduce or eliminate overcoding and RADV audit risk.

These technologies are increasingly used to support Hierarchical Condition Categories (HCC) risk adjustment coding, helping organizations identify undocumented conditions earlier and strengthen the accuracy of risk adjustment submissions. Emerging research also supports the growing role of artificial intelligence in documentation analysis.

Importantly, these technologies are not designed to replace coding expertise or clinical judgment. Their primary value lies in helping risk adjustment teams focus attention on the records and member populations where documentation improvements can have the greatest impact.

Building the Operational Capabilities for Real-Time Risk Programs

Technology alone cannot transform risk adjustment operations. Organizational alignment and well-designed workflows are equally important.

Leading health plans are establishing risk operations teams responsible for coordinating analytics, coding workflows, and provider engagement initiatives. These teams serve as the connective layer between data insights and operational action within the broader risk adjustment program.

Within these programs:

• Risk operations leaders monitor documentation trends and coordinate chart review priorities.
• Coding teams focus on validating diagnoses and ensuring documentation integrity.
• Provider engagement teams work directly with clinicians to reinforce documentation best practices and strengthen collaboration across the payer risk adjustment ecosystem.

Strong feedback loops are critical to making these programs effective. When documentation patterns reveal potential gaps, those insights must be shared with providers in a constructive and timely way. Successful programs position documentation guidance as part of broader clinical documentation improvement efforts, helping providers understand how accurate documentation supports both population health management and reimbursement accuracy.

Measuring the Impact of Real-Time Risk Adjustment

Within any payer risk adjustment program, operational metrics help organizations determine whether risk adjustment factors accurately reflect the clinical complexity of their member population.

Traditional program metrics, such as overall risk score performance, remain important. However, many organizations now track additional operational indicators that provide deeper insight into how effectively their risk adjustment programs function throughout the year.

Common examples include:

• Timeliness of chart review completion
• Coder productivity and throughput
• Speed of documentation gap identification
• Rate of suspected condition closure
• Variability in risk scores across reporting periods

Monitoring these indicators provides a more dynamic view of risk adjustment performance. It also allows organizations to identify operational bottlenecks earlier and make course corrections long before final submissions are due.

Another way of measuring the impact of risk adjustment is by eliminating the waste associated with unnecessary chart reviews, thus realizing cost savings. Excluding members without HCC or risk-adjustable conditions from review pipelines immediately reduces heavy administrative expenses. This data-driven solution maximizes operational efficiency, saving significant costs and allowing staff to focus strictly on high-yield interventions and improved health outcomes.

These operational insights are increasingly important as organizations manage multiple programs simultaneously, including risk adjustment for Medicare, Medicaid, and commercial initiatives.

The Future of Risk Adjustment Operations

Looking ahead, advances in analytics, artificial intelligence, and workflow automation will continue shaping how risk adjustment programs operate.

Predictive models are beginning to identify members whose clinical histories suggest undocumented conditions. AI-driven analytics platforms can highlight documentation patterns across large provider networks. Automated workflow tools can prioritize chart reviews and route documentation questions to the appropriate teams.

Together, these capabilities are helping organizations move beyond reactive chart review cycles toward more proactive documentation management that complements, but doesn’t replace, the human coder.

Moving Toward a More Proactive Risk Adjustment Strategy

Real-time risk adjustment represents a natural evolution in how organizations manage risk adjustment documentation and coding, improve payment accuracy, and strengthen risk program performance.

Retrospective programs will remain essential for validating diagnoses and recovering missed conditions from prior encounters. However, when combined with prospective documentation improvement initiatives and real-time analytics, they become part of a more comprehensive strategy for managing risk adjustment performance.

Many health plans are now exploring integrated approaches that combine retrospective chart review, prospective documentation improvement, and real-time analytics. Modern risk adjustment solutions and services, such as those provided by HealthEdge®, are designed to support this evolving model by helping organizations strengthen documentation validation, provider collaboration, and analytics-driven risk operations.

Learn more about how HealthEdge is empowering health plans to build a successful, sustainable risk adjustment program, download our White Paper: Getting Risk Adjustment Right – A Guide for Modern Health Plans.