CMS Releases 2020 Medicare Advantage and Part D Rates

April 2019 ~

On April 1, CMS released its finalized payment and policy changes for Medicare Advantage (MA) and Medicare Part D plans for the 2020 coverage year. CMS states the final updates will continue to maximize competition among Medicare Advantage and Part D plans, as well as include important actions to address the nation’s opioid crisis.

The 2020 Medicare Advantage (MA) and Part D Rate Announcement and Final Call Letter finalize CMS’ 2020 Advance Notice and Draft Call Letter, published in two parts on December 20, 2018 (Part I) and January 30, 2019 (Part II).

2020 Rate Announcement

Through the 2020 Rate Announcement, CMS is finalizing updates to the methodologies used to pay Medicare Advantage plans and Part D sponsors.

Net Medicare Advantage Plan Payment Impact

CMS has provided the following information which indicates the expected impact of the policy changes on Medicare Advantage plan payments relative to last year.

2020 Part C Risk Adjustment Model

As required under the 21st Century Cures Act, CMS made changes to the risk adjustment model to take into account the number of conditions an individual beneficiary may have and to make an additional adjustment as the number of conditions increases.

For 2020, CMS will implement the Payment Condition Count model, which will account for the total number of medical conditions a beneficiary has that qualify for the risk adjustment model. CMS will begin the phase-in of the new model in 2020, starting with a blend of 50% of the risk adjustment model first used for payment in 2017 and 50% of the new risk adjustment model.

Using Encounter Data

For 2020, CMS is finalizing the proposal to calculate risk scores by blending 50% of the risk score calculated using diagnoses from encounter data, Risk Adjustment Processing System (RAPS) inpatient diagnoses, and fee-for-service (FFS) diagnoses with 50% of the risk score calculated with diagnoses from RAPS and FFS.

CMS has also finalized the proposal to implement the phase-in of the new risk adjustment model by calculating the encounter data-based risk scores exclusively with the new risk adjustment model, while continuing use of the risk adjustment model first implemented for 2017 payment for calculating the RAPS-based risk scores.

Coding Pattern Adjustment

In 2020, CMS will apply a coding pattern adjustment of 5.9% (the minimum adjustment for coding pattern differences required by the statute) to reflect differences in diagnosis coding between MA organizations and FFS providers.

Medicare Employer Retiree Plans

In 2019, CMS completed the transition to administratively-set rates for Medicare Employer Retiree Plans (Employer Group Waiver Plans or EGWPs that was originally scheduled to be completed in 2018. For 2020, CMS will continue that payment policy.

Puerto Rico
CMS will continue policies intended to provide stability for the MA program in Puerto Rico. These policies include:

-Continuing to base the MA county rates in Puerto Rico on the relatively higher costs of beneficiaries in fee-for-service Medicare who have both Medicare Parts A and B;

-Continuing the statutory interpretation that permits certain counties in Puerto Rico to qualify for an increased quality bonus adjusted benchmark;

-Continuing to applying an adjustment in the calculation of the per capita cost estimate used in the benchmark to reflect the nationwide propensity of beneficiaries with zero claims.

2020 Final Call Letter

Improving Drug Utilization Review Controls (Opioids)

CMS says it will continue to evaluate the success and impact of new policies being implemented in 2019 (including Part D drug management programs for high-risk opioid users, and improved safety alerts, such as the 7-day supply limit for opioid naïve patients) and will continue them into 2020.

Additionally, the agency is finalizing the additional policies (below) for 2020 to help Medicare plan sponsors prevent and combat prescription opioid overuse.

  • Pain Management and Complementary and Integrative Treatments in Medicare Advantage: CMS is encouraging plans to take advantage of the new flexibilities to offer targeted benefits and cost-sharing reductions for patients with chronic pain or undergoing addiction treatment.
  • Access to Opioid Reversal Agents: CMS is strongly encouraging Part D sponsors to provide lower cost-sharing for opioid-reversal agents.
  • Star Ratings: CMS is taking steps to advance Medicare Part D opioid-related measures through the Star Ratings development process. We are updating the specifications for the Use of Opioids at High Dosage and/or from Multiple Providers, and Concurrent Use of Opioids and Benzodiazepines measures, and adding them to the display page. Reporting measures on the display page is a necessary step before the measure can be formally adopted as part of the Star Ratings through rulemaking.

Star Ratings Enhancements      

CMS announced that 2020 will be the final year when all changes to the methodology for calculating the ratings and any changes in the measurement set will be addressed using the Call Letter. The methodology for the 2021 Part C and D Star Ratings program was codified in the calendar year 2019 Medicare Part C and D final rule, published on April 3, 2019.

For 2020, the agency plans to adjust the Star Ratings in the event of extreme and uncontrollable circumstances, such as major hurricane weather events, and will expand the number of measures used in the determination of the Categorical Adjustment Index to include all Star Ratings measures that remain after applying the exclusion criteria for a candidate measure for adjustment.

In the Letter, the agency also finalizes several measure updates and announcing the removal of three measures from the 2022 Star Ratings. CMS will remove the following measures from the 2022 Star Ratings program due to the measures showing low statistical reliability:

-Adult BMI Assessment (Part C)

-Appeals Auto-Forward (Part D)

-Appeals Upheld (Part D)

The agency states it will temporarily remove the Controlling High Blood Pressure (Part C) measure from the 2020 and 2021 Star Ratings due to a substantive measure specification change to align with the release of new hypertension treatment guidelines from the American College of Cardiology and American Heart Association (AHA).

Special Supplemental Benefits for the Chronically Ill   

CMS provided guidance, in the Letter, about new special supplemental benefits for the chronically ill.

For 2020, the agency states, MA plans will have greater flexibility to offer chronically ill patients a broader range of supplemental benefits that are tailored to their specific needs, such as providing meals beyond a limited basis, transportation for non-medical needs, and home environment services if these benefits have a reasonable expectation of improving or maintaining the health or overall function of the patient as it relates to their chronic condition or illness.

For more information, refer to the following documents provided by CMS:

2020 Rate Announcement and Call Letter

Ratebooks and Supporting Calculation Data

2013-2017 FFS Data Used in the Ratebook Calculations

Source(s): CMS Fact Sheet; 2020 Rate Announcement and Call Letter; CMS Roadmap; CMS Blog; Healthcare DIVE; Healthcare Finance;