Risk adjustment is a statistical process that takes into account the underlying health status and health spending of the enrollees in an insurance plan when looking at their health care outcomes or health care costs. The Risk Adjustment (RA) model uses a patientís demographics and diagnoses to determine a risk score, which is a relative measure of how costly that patient is anticipated to be. Healthy patients have a below-average Risk Adjustment Factor (RAF) score so revenue from the insurance premium is transferred from healthy patients to patients with an above-average RAF score.