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CMS releases advance notice of MA payment, risk model

For 2019, CMS will blend 25 percent of encounter data into risk scores for MA payment.

Susan Morse, Senior Editor

The Centers for Medicare and Medicaid Services on Wednesday released the first part of its 2019 advance notice of changes for Medicare Advantage capitation rates and Part D payment policies.

This includes a change in the percent of encounter data used for payment, a policy that in the past has raised concerns.

[Also: Physician groups urge CMS for policies that would allow them to compete with hospitals]

Historically, CMS has used diagnoses submitted into CMS' risk adjustment payment system by Medicare Advantage organizations.

In recent years, CMS began collecting encounter data from Medicare Advantage organizations, which also includes diagnostic information, in the method of payment.

[Also: CMS expands Medicare Advantage value-based insurance design model]

In 2016, CMS blended 10 percent of the encounter data with 90 percent of the risk adjustment payment system risk scores, or RAPS.

For 2017 and 2018, CMS continued to use a blend to calculate risk scores, by calculating 25 percent encounter data and 75 percent RAPS in 2017, and 15 percent encounter data and 85 percent RAPS in 2018.

For 2019, CMS proposes to calculate risk scores by adding 25 percent of the risk score calculated using diagnoses from encounter data and fee-for-service diagnoses with 75 percent of the risk score calculated with diagnoses from the risk adjustment payment system, or RAPS and fee-for-service diagnoses.

CMS is also proposing changes to the CMS-HCC risk adjustment model that is used to pay for aged and disabled beneficiaries enrolled in Medicare Advantage plans.

This includes an evaluation of adding mental health, substance use disorder, and chronic kidney disease conditions to the risk adjustment model and making adjustments take into account the number of conditions an individual beneficiary may have, as well as a variety of additional technical updates.

This will be phased-in with a blend of 75 percent of the risk adjustment model used for payment in 2017 and 2018, and 25 percent of the new risk adjustment model that includes additional mental health, substance use disorder, and chronic kidney disease conditions.

A "payment condition count model" will take into account the number of conditions that a beneficiary has, only among the conditions that are included in the payment model.

An alternative "all condition count model" will take into account all conditions that a beneficiary has, including both those in the payment model and those not in the model.

Many of these changes were required by the 21st Century Cures Act.

The payment condition count model is projected to increase MA risk scores by 1.1 percent, while the all condition count model would decrease MA risk scores by -0.28 percent, CMS said.

Under the payment condition count model, the change in MA contracts' risk scores is generally positive and less varied than the all condition count model. The change in MA contracts' risk scores under the all condition count model is more varied, with both negative and positive changes.

CMS calculates risk scores using diagnoses submitted by Medicare fee-for-service providers and by Medicare Advantage organizations.

The 2019 advance notice has a 60 day comment period. Comments on proposals should be submitted by March 2, 2018.

The final 2019 Rate Announcement will be published by Monday, April 2, 2019.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

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