Risk Adjustment Based on Social Factors: State Approaches to Filling Data Gaps

This report examines examples from two state Medicaid programs and one nonprofit quality measurement and reporting organization of the data sources used to identify patients’ social risk factors when risk-adjusting payments or measuring quality.

To mitigate the risk that providers could be unfairly penalized based on the higher costs of addressing their patients’ social needs or for quality performance that is hampered by their patients’ social risk factors, some states have developed risk adjustment methodologies that take patients’ social risk factors into account.