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A Few Changes Between the Final Call Letter and the January Proposal

A Few Changes Between The Final Call Letter And The January Proposal

The release of the final Centers for Medicare and Medicaid Services (CMS) 2019 Call Letter for Medicare Advantage and Part D revealed a few significant changes from the draft of the February Call Letter previously released. In this blog, we focus only on the significant changes identified between the previous draft and the proposed final. Read the original blog on the draft letter here.

Significant changes from the draft version to the proposed final 2019 Call Letter include:

  • Larger Growth Factor and Part C Revenue Increase: The Medicare fee-for-service trends increased during the time between the draft and final letter. When you take all positives and negatives into account for the rate-methodology, we projected a Part C increase in the mid 2% range on average. However, with the final revenue increasing, the average Part C increase will be in the mid 3% range. With other changes, the actual revenue increase could reach above 6% range. As we said, this will drive expected growth of MA further this year, next year, and well into the future. When compared with traditional Medicare, the handsome increase will make the value proposition in Medicare Advantage all the more evident.
  • Employer Group Waiver Plans (EGWP) Bid Calculation Alternative: CMS will fully transition to using only individual market plan bids to calculate the bid-to-benchmark ratios to set EGWP payments but keep the initially proposed adjustment as an alternative. For 2019, the individual market ratios will be adjusted to account for the difference in the proportion of beneficiaries enrolled in HMOs and PPOs between EGWPs and individual market plans. This increases the EGWP revenue.
  • CMS-HCC Model Changes but No Disease Counts: EDPS Transition Back: For 2019, CMS will use the updated CMS-HCC risk adjustment payment model without the proposed disease count variables. This significantly reduces the complexity of the calculation process over the next four years. In 2019, the updated model will have 75% weighting using traditional RAPS submissions and 25% weighting using EDPS 837 encounter submissions. Globally, the move slightly reduces revenue to plans as the condition counts would have added revenue. In addition, this change could spell revenue trouble for plans that are not ready on encounter data.
  • RxHCC Risk Adjustment Model Change Delay: CMS will not implement the updated RxHCC Risk Adjustment model in 2019. CMS will continue to use the RxHCC Risk Adjustment model used in 2018.
  • Civil Monetary Penalty Plan Indicator Out: CMS backed off placing an indicator on the CMS plan website to alert beneficiaries to plans that have CMPs in place. CMS stated it would have caused confusion and not represented the current status for the plans. We are not sure why CMS believed that it could not resolve these concerns. There is a Star indicator in place and beneficiaries understand it. CMS could have added a clear description of the sanction icon as well. We think plans should be rewarded for a good track record or clean record.
  • No Major Star Changes: There were few major changes to the Star rating. Refer to our previous blog for the coming Comprehensive Management Measures and why plans need to focus on integrating quality, utilization management, pharmacy management and care management.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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