May 16, 2011

Risk adjustment software to support health care reform

The Johns Hopkins Bloomberg School of Public Health is launching an updated version of the Johns Hopkins ACG System to support federal health care reform. Developed in 1991, the Adjusted Clinical Groups System is an industry standard risk adjustment and predictive modeling software originally developed by a team of researchers from the Bloomberg School.

The updated software will be distributed to the newly formed state health insurance exchanges, or HIEs, and to health plans currently under contract with these exchanges. The innovative technology will be distributed at no cost to facilitate health care insurance reform and encourage equitable care.

“A key provision of federal health reform is the establishment of state-level health insurance exchanges,” said Jonathan Weiner, executive director of the ACG team and a professor in the Bloomberg School’s Department of Health Policy and Management. “Uninsured persons will be able to get subsidized insurance through these exchanges whether or not they have any pre-existing medical conditions. When setting payment rates for the private health plans that will insure people in these HIEs, the differences in the medical needs of the persons selecting different plans must be accounted for. Without such risk adjustment, the health insurance exchange, and possibly health reform itself, could fail, as some health plans may go under and others get large windfalls.”

The updated ACG-HIE software is based on the Johns Hopkins ACG Risk Adjustment System, a computer-based algorithm that assesses the health of people enrolled in a given health plan or health system. Government agencies or health plans, in turn, use the ACG System to help predict the need for their future health care services. Today, ACGs help finance and manage the care of more than 80 million people globally and are currently being used by 16 state Medicaid agencies. The Bloomberg School has a full-time team of faculty, clinicians and staff dedicated to research, development and maintenance of the ACG System, and is currently developing the 11th version of ACGs.

“The reason we continue to develop and disseminate the ACG tool is to help promote equitable, effective and efficient health care in the U.S. and around the globe,” Weiner said. “The nation is about to embark on the biggest reform of our health insurance system in history. Making sure that plans covering persons with high levels of medical needs are adequately reimbursed is key to the success of this reform.”

DST Health Solutions will support and distribute this free version of the ACG software to state health insurance exchanges on behalf of the university.

For more information on Johns Hopkins ACGs and the special HIE version of the software, go to