CMS 2019 Medicare Advantage Part I Advance Notice Released

January 2018 ~

CMS, on December 27th, released Part One of the 2019 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part D Payment Policies, containing proposed changes to the Part C Risk Adjustment Model and the use of encounter data.

2019 Part C Risk Adjustment Model

Mandates within the 21st Century Cures Act (Cures Act) require CMS make certain changes and improvements to the Part C risk adjustment model for 2019 and subsequent years, such as an evaluation of adding mental health, substance use disorder, and chronic kidney disease conditions to the risk adjustment model and making adjustments to take into account the number of conditions an individual beneficiary may have, as well as a variety of additional technical updates.

In response, CMS has proposed several changes to its Hierarchical Condition Category (CMS-HCC) Risk Adjustment model, including a proposal for a new risk adjustment model, the “Payment Condition Count (PCC) model,” as well as an alternative model, the “All Condition Count (ACC) model.”

The PCC model is designed to account for the total number of medical conditions a beneficiary has that are included in the payment model. CMS anticipates the PCC model will increase MA risk scores by 1.1%.

As an alternative, the ACC model would take into account all conditions that a beneficiary has, including both those in the payment model and those not in the model. The Agency estimates that the ACC model will decrease MA risk scores by -0.28%.

Also in compliance with the Cures Act, CMS must fully phase-in changes to the risk adjustment model by 2022. CMS has proposed three year phase-in period for the new model, set to begin in 2019, starting with a blend of 75% of the risk adjustment model used for payment in 2017 and 2018 and 25% of the new risk adjustment model that includes additional mental health, substance use disorder, and chronic kidney disease conditions.

Encounter Data Use

Concerning the use of encounter data, CMS is proposing that risk scores be calculated by adding 25% of the risk score calculated using diagnoses from encounter data and fee-for-service (FFS) diagnoses with 75% of the risk score calculated with diagnoses from the risk adjustment payment system, or Risk Adjustment Processing System (RAPS) and FFS diagnoses. In 2018, the agency is using a risk score blend of 85% fee-for-service data and 15% encounter data.

As directed by the Cures Act, the 2019 Advance Notice is being published in two parts. Both Part One and Part Two are scheduled to be finalized in the annual Rate Announcement by April 2nd, 2019.

Comments on the proposals laid out in Part One must be submitted by Friday, March 2nd, 2018.

For more information, refer to CMS’ Advance Notice and Draft Call Letter and Fact Sheet and for full proposal details see Part One, here(pdf).



Source(s): Centers for Medicare & Medicaid Services (CMS) Fact Sheet; CMS Notice(pdf); Modern Healthcare; Becker’s Hospital Review;