States are looking for ways to improve the accuracy of payments to Medicaid managed care plans that provide long-term services and supports (LTSS) to Medicaid beneficiaries. The range of demographic and functional characteristics of seniors and individuals with disabilities receiving LTSS and other limitations makes it particularly difficult to predict the need for LTSS. This brief, supported through the West Health Policy Center, describes the challenges of predicting costs for MLTSS enrollees, as well as solutions to overcome these challenges. Given the diversity of the LTSS population, states developing a risk adjustment strategy for Medicaid managed long-term services and supports programs should start by reviewing the characteristics of various subpopulations and their functional status.  Although incorporating this information into a risk model does not account for all factors, such as the availability of family caregivers, disease progression, and social determinants of health, states seeking to develop risk adjustment models should consider investing in analyses to better understand the diversity of their population and further improve payment accuracy.