Given the requirements of the 21st Century Cures Act (CURES), the Centers for Medicare and Medicaid Services (CMS) for the second year in a row issued a first advanced notice for 2020 in late December. The notice deals largely with giving additional notice related to risk adjustment changes in store for 2020.
CMS notes that “a key element in the success of Medicare Advantage is ensuring that payments to plans reflect the relative risk of the people who enroll.” This is embodied in the very robust risk adjustment program it has rolled out over the last two decades. As we know, CMS is getting more and more savvy as it seeks to ensure proper payments to each plan based on the risk of its population. This comes with changes both to the global demographic factors as well as the clinical risk indicators.
Condition count to impact risk adjustment model
For 2020, consistent with CURES, CMS is once again proposing to take into account the number of conditions an individual beneficiary may have in the risk adjustment model. It proposed this last year, but only implemented changes related to substance use disorder, mental health, and Chronic Kidney Disease (CKD) diagnoses.
In the 2019 Advance Notice, CMS offered three proposals with regard to adjusting the model to take into account the number of conditions an individual has:
- The Payment Conditions Count (PCC) model, where only those paid in the model will be factored into the adjustment for the total number of conditions.
- The All Conditions Count (ACC) model, where any condition regardless of whether it is currently paid in the model will be factored into the adjustment for the total number of conditions.
- Not factoring the number of conditions in.
As we noted, it backed away from any proposal here, but must implement now to meet the mandate. It will do so by implementing the PCC in 2020. The proposed PCC model includes a separate factor for the count of conditions. While each HCC that is present has its weight, the PCC will compensate plans more for those with a greater number of overall conditions as this will lead to higher costs. For 2020, CMS will phase in the implementation of the proposed changes by calculating risk scores using the sum of:
- 50% of the risk score calculated with the proposed “Payment Condition Count” CMS-HCC model and
- 50% of the risk score calculated with the 2017 CMS-HCC model.
Continued phase-in of encounter data submissions
For 2019, CMS calculated risk scores by adding 25% of the risk score calculated using diagnoses from encounter data, FFS claims, and RAPS inpatient records with 75% of the risk score calculated using diagnoses from all RAPS records and FFS claims. For 2020, CMS will further phase in encounter data by calculating risk scores by adding 50% of the risk score calculated using diagnoses from encounter data, FFS claims, and RAPS inpatient records with 50% of the risk score calculated with diagnoses from all RAPS records and FFS claims.
Specifically, CMS will calculate the encounter data-based risk scores as follows:
- With the proposed PCC CMS-HCC model,
- Using diagnoses from encounter data, FFS claims, and RAPS inpatient records.
RAPS risk scores would be calculated as follows:
- With the 2017 CMS-HCC model,
- Using diagnoses from all RAPS records and FFS claims.
Suffice it to say that the maintenance and calculation of risk adjusted revenue just got twice as complicated – as if it was not complicated enough already.