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Risk Adjustment Actions Across Multiple Reporting Periods

For MA plans, 2020 has been a period of vast changes in the risk adjustment industry, unlike anything we have seen in years past. The year began with everyone scurrying to hit the September 2019 sweeps date that set the new rates for the 2020 payment year, not knowing what was about to hit. As we moved into early 2020 focused on how best to shore up our MYRA (Mid-Year Risk Adjustment), little did we know what was about to become our new norm. No longer was our focus on just RAPs versus EDPS ratios and capture rate of diagnosis on claims, or even how best would we kick off our intervention programs such as in-home assessments or medical record retrievals, now we had to pivot to understand what impacts COVID -19 would have on our risk adjustment models.

Risk adjustment programs had to quickly adapt and understand how to incorporate telehealth into traditional intervention workstreams in a senior population that might not have the means or abilities to use technology needed for an audio/video, non-contact physician visit, and look to creative means to retrieve medical records in now empty office building as many are working remote. While CMS announced that they would extend the reporting period for 2019 into August of 2021, this now adds an additional burden onto both providers and health plans as they will have to capture data on members across multiple reporting periods, not to mention the reduction in risk adjustment revenue in 2021 - for some plans estimated to be in the tens of millions of dollars.

With many plans still sorting through the 2021 programs changes, including a new member mix encompassing ESRD members, a fast approaching open enrollment period, and new HCC risk adjustment corridors (just to name a few), CMS released a new CY 2022 memo on September 14th outlining that the 2022 Advanced Notice is being published in two parts due to requirements in the 21st Century Cures Act that mandate certain changes to Part C risk adjustment and a 60-day comment period for these changes. This is yet another announcement to the many already released that will make changes to payment methodologies for 2022. The payment policies for 2022, discussed in both Part I and Part II of the Advance Notice, will be finalized in the CY 2022 Rate Announcement, which the statute requires be published no later than April 5, 2021. Here are some of the highlights noted in this latest release:

  • CMS is issuing Part I of the CY 2022 Advance Notice earlier than in prior years in order to provide plans with earlier notification of proposed payment changes for 2022. This earlier announcement of proposed changes to the MA and Part D payment methodologies will be helpful for stakeholders in light of the uncertainty created by the COVID-19 pandemic. MA organizations and Part D sponsors will have more time to take this information into consideration as they prepare their bids for 2022, which must be submitted by the first Monday in June 2021.

  • For CY 2022, CMS is proposing to fully phase in the CMS-HCC model first implemented for CY 2020 (i.e., the 2020 CMS-HCC model), as required by the 21st Century Cures Act. Specifically, the 2020 model adds variables that count conditions in the risk adjustment model (“payment conditions”) and includes for payment additional conditions for mental health, substance use disorder, and chronic kidney disease. This represents a change from the blend for 2021 of 75% of the risk score calculated using the 2020 CMS-HCC model and 25% of the risk score calculated using the older 2017 CMS-HCC model.

  • CMS calculates risk scores using diagnoses submitted by MA organizations and from Medicare fee-for-service (FFS) claims. Historically, CMS has used diagnoses submitted into CMS’ Risk Adjustment Processing System (RAPS) by MA organizations for the purpose of calculating risk scores for payment. In recent years, CMS began collecting encounter data from MA organizations, which also includes diagnostic information. CMS began using diagnoses from encounter data to calculate risk scores for CY 2015, and has since continued to use a blend of encounter and RAPS data-based scores through 2021, when risk scores will be calculated with 75% encounter data and 25% RAPS data.

  • With the proposed full phase-in of the 2020 CMS-HCC model, which is designed to calculate risk scores using diagnoses from encounter data submissions, the Part C risk score used for payment in 2022 would rely entirely on encounter data as the source of MA diagnoses.

  • Also, for CY 2022, CMS is proposing to discontinue the policy (used for CY 2019, CY 2020, and CY 2021) of supplementing diagnoses from encounter data with diagnoses from inpatient records submitted to RAPS for calculating beneficiary risk scores.

As we close out 2020, look forward to 2021, and plan for 2022, many of these industry changes can be overwhelming and impact could be felt for years to come. Rebellis Group is staffed with industry experts who can address what impacts these policy changes can have across your whole Medicare Advantage health care ecosystem, including risk adjustment, quality, STARs, and HEDIS and provide solid solutions to ensure maximum revenue retention. Contact us to see how Rebellis Group can support your organization during this continual time of change.

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