In 2005, what is the maximum permissible add-on for subjective factors?

In 2005, what is the maximum permissible add-on for subjective factors?

• A. None
• B. 3%
• C. 5%
• D. Whatever is called for by the examining physician

Answer: (B)

In this area, subjective factors are risk adjustments added to the base rate to reflect elements not captured by objective classifications. However, there’s a fixed ceiling on how large that add-on can be. For 2005, the maximum permissible add-on for subjective factors is 3%. This cap keeps adjustments fair and consistent across plans, rather than letting subjective judgment run unchecked. The other possibilities don’t fit because there is indeed a defined limit (not none), it’s not as high as 5%, and the adjustment isn’t left entirely to the examining physician’s discretion—it follows established guidelines with a 3% cap.

In this area, subjective factors are risk adjustments added to the base rate to reflect elements not captured by objective classifications. However, there’s a fixed ceiling on how large that add-on can be. For 2005, the maximum permissible add-on for subjective factors is 3%. This cap keeps adjustments fair and consistent across plans, rather than letting subjective judgment run unchecked. The other possibilities don’t fit because there is indeed a defined limit (not none), it’s not as high as 5%, and the adjustment isn’t left entirely to the examining physician’s discretion—it follows established guidelines with a 3% cap.