The agency uses eight steps to calculate a person's risk score.

(1) Step 1. Collect paid claims and health plan encounter data. The agency obtains a set of paid fee-for-service claims and managed care encounters for a client.

(a) For clients age 17 and younger, the agency uses all paid claims and encounters within the last 24 months.

(b) For clients age 18 and older, the agency uses all paid claims and encounters within the last 15 months.

(i) The claims and encounters include the international classification of diseases (ICD) diagnosis codes and national drug codes (NDC) submitted by health care providers. These are used in steps 2 and 3 to create a set of risk categories.

(ii) The agency uses two algorithms developed by the University of San Diego:

(A) Chronic illness and disability payment system (CDPS) which assigns ICD diagnosis codes to CDPS risk categories (see Table 3 in subsection (5)(b) of this section); and

(B) Medical Rx (MRx) which assigns NDCs to MRx risk categories (see Table 2 in subsection (3)(b) of this section).

(2) Step 2. Group ICD diagnosis codes into chronic illness and disability payment system risk categories.

(a) To group ICD diagnosis codes into the CDPS risk categories (see Table 1 in (b) of this subsection), the agency uses an ICD diagnosis code to CDPS risk categories crosswalk in subsection (1)(b)(ii)(A) of this section. Each of the ICD diagnosis codes listed is assigned to one risk category. If an ICD diagnosis code is not listed in the crosswalk it does not map to a risk category that is used in the calculation of the risk score.

(b) Table 1. Titles of Chronic Illness and Disability Payment System Risk Categories

(3) Step 3. Group national drug codes (NDCs) into MRx risk categories.

(a) To group the NDC codes into MRx risk categories (see Table 2 in (b) of this subsection), the agency uses a NDC code to MRx risk categories crosswalk in subsection (1)(b)(ii)(B) of this section.

(b) Table 2. Titles of Medicaid Rx Risk Categories

(4) Step 4. Remove duplicate risk categories. After mapping all diagnosis and drug codes to the risk categories, the agency eliminates duplicates of each client's risk categories so that there is only one occurrence of any risk category for each client.

(5) Step 5. Select the highest CDPS risk category within a disease group.

(a) The agency organizes CPDS risk categories into risk category groups of different intensity levels. The high risk category in each group is used in the calculation of the risk score. The lower level risk categories are eliminated from further calculations.

(b) Table 3. Chronic Disease Payment System Risk Category Groups

(6) Step 6. Determine age/gender category.

(a) For each client, the agency selects the appropriate age/gender category. The 11 categories are listed in Table 4 in (b) of this subsection. The categories for ages below five and above 65 are gender neutral.

(b) Table 4. Age/Gender Categories

(7) Step 7. Apply risk weights.

(a) The agency assigns each risk category and age/gender category a weight. The weight comes from either the model for clients who are age 17 and younger or from the model for clients age 18 and older.

(b) In each model there are three types of weights.

(i) Age/gender – Weights that correspond to the age/gender category of a client.

(ii) CDPS – Weights that correspond to 58 of the CDPS risk categories.

(iii) MRx – Weights that correspond to 45 of the MRx risk categories.

(c) Table 5. Risk Score Weights

(8) Step 8. Sum risk weights to obtain the risk score.

After obtaining the weights that correspond to a client's age/gender category and set of risk categories, the agency takes a sum of the values of all of the weights. This sum is the risk score for a client.