Risk Adjustment Outlier Analysis
Description
The risk adjustment (RA) program spreads the financial risk borne by Issuers due to offering a variety of plans meeting the need of the diverse population. RA payments are distributed based on population risk levels. CCIIO uses a distributed data solution (EDGE servers) to calculate plan average actuarial risk and associated RA transfers and must avoid potential program integrity risks to annual calculations.
Detailed example
Maintain RA program integrity
AI / analytics pattern
Classical/Predictive Machine Learning: Models trained on data to make predictions or classifications based on identified patterns or relationships.
Automation level / stage
a) Pre-deployment – The use case is in a development or acquisition status.
Expected benefit
Implement ML to identify outliers in issuer data that may unduly influence risk adjustment transfers.
Controls / human review
ATO: Not reported; PIA: Not published