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From Health Law Daily, December 28, 2017

CMS proposes MA risk adjustment model changes under Cures Act

By Victoria Moran, J.D., M.H.A.

The Medicare Advantage (MA) risk adjustment model would include mental health, substance-use disorder, and chronic kidney disease under proposed changes to the CMS-HCC Risk Adjustment Model as required by the 21st Century Cures Act (P.L. 114-255). In an Advance Notice of Methodological Changes, CMS proposed taking into account the number of conditions a beneficiary has, and two new risk adjustment models. Finally, the Advance Notice discusses its proposal for the required three-year phase in of the new model (Advance Notice of Methodological Changes for Calendar Year (CY) 2019 for the Medicare Advantage (MA) CMS-HCC Risk Adjustment Model, December 27, 2019).

The requirements. The 21st Century Cures Act added a requirement that CMS make improvements to risk adjustment models for 2019 and subsequent years. This includes evaluating the impact of adding diagnosis codes related to mental health and substance use disorders, and including the severity of chronic kidney disease in the risk adjustment model. CMS is also required to take into account the number of diseases or conditions of an MA plan enrollee has by making adjustments as the number of diseases or conditions increase. Finally, CMS must phase-in risk adjustment payment changes over a three-year period beginning in 2019, with full implementation by 2022. Because of requirements in the Cures Act, the Advance Notice is being published in two parts, with a 60-day comment period for proposed changes to the Part C risk adjustment model.

Proposed changes. The following are proposed changes to the risk adjustment model:

  • add additional mental health, substance use disorder, and chronic kidney disease conditions in the model;
  • add new factors to the six community and single long term institutional segments that take into account the number of conditions a beneficiary has;
  • update the data years used to calibrate the risk assessment model; and
  • select 2014 diagnoses for calibration using the same approach used to filter encounter data records.

The Advance Notice discusses two new risk adjustment models (the "Payment Condition Count model" and "All Condition Count model"), though CMS prefers the Payment Condition Count model and offered the All Condition Count model as an alternative. The All Condition Count model takes into account all of a beneficiary’s conditions (both those in the payment model and those not in the model), while the Payment Condition Count model only takes into account the conditions in the payment model.

With regard to the three-year phase-in requirement, CMS proposes beginning the phase in of the Payment Condition Count model in 2019, with a blend of 75 percent of the CMS-HCC model used for payment in 2017 and 2018, and 25 percent of the Payment Condition Count model.

Comments. In order to receive consideration, comments on the proposed changes must be received by March 2, 2018. The Final Announcement of 2019 MA Capitation Rates and MA and Part D Payment Policies is scheduled to be released on April 2, 2018.

MainStory: TopStory AgencyDocuments CMSNews PartCNews RiskNews

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