CMS Releases 2020 Medicare Advantage Risk Adjustment Payment Model

January 2019 ~

CMS has issued Part I of the Advance Notice of Methodological Changes for Calendar Year (CY) 2020 for the Medicare Advantage CMS-Hierarchical Condition Category (HCC) Risk Adjustment Model.

Section 1853(a)(1)(I)(i)(I) of the Social Security Act (42 U.S.C. 1395w–23(a)(1)(I)(i)(I)), as added by section 17006(f) of the 21st Century Cures Act, requires us to make improvements to risk adjustment for 2019 and subsequent years. CMS is, among other things, specifically directed to:

  • Evaluate the impact of including in the risk adjustment model:

(1) Additional diagnosis codes related to mental health and substance use disorders, and

(2) Including the severity of chronic kidney disease.

  • Take into account the total number of diseases or conditions of an individual enrolled in an MA plan by making an additional adjustment as the number of diseases or conditions of an individual increases.
  • Phase-in any changes to risk adjustment payment over a 3-year period, “beginning with 2019, with such changes being fully implemented for 2022 and subsequent years.”

According to the notice, CMS is proposing to begin the phase in of this 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 proposed. The agency proposes to calculate risk scores by adding 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 diagnoses. CMS is also proposing 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 risk scores with RAPS data.

The agency states the proposed model for 2020 builds upon the model being used for 2019 risk adjustment payments that includes technical updates such as calibrating the model with more recent data, selecting diagnoses with the same method used for encounter data, and including additional condition categories for mental health, substance use disorder, and chronic kidney disease.

CMS will accept public comments on the latest advance notice through February 19. The agency states it will finalize all changes to MA payments for 2020 in an annual rate announcement that the agency will release by April 1.

Source(s): CMS Fact Sheet; Advance Notice of Methodological Changes for Calendar Year (CY) 2020 for the Medicare Advantage (MA) CMS-HCC Risk Adjustment Model (pdf); Healthcare Finance; American Hospital Association; Healthcare Dive; Modern Healthcare; Inside Health Policy;

 

 

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