2022 Medicare Advantage Advance Notice Part I – Risk Adjustment
Today, the Centers for Medicare & Medicaid Services (CMS) released Part I of the Contract Year (CY) 2022 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (the Advance Notice), which contains key information about the Part C CMS-Hierarchical Condition Categories (HCC) risk adjustment model and the use of encounter data for CY 2022.
The CY 2022 Advance 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. Other changes to payment methodologies for 2022 that are typically contained in the Advance Notice only require a 30-day comment period and will be released at a later time in accordance with that requirement. 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.
CMS is issuing Part I of the CY 2022 Advance Notice earlier than in past practice, 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 coronavirus disease 2019 (COVID-19) pandemic. MA organizations and Part D sponsors will benefit from having information contained in Part I of the Advance Notice earlier in the year so that they 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.
2022 Part C Risk Adjustment Model
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, per the 21st Century Cures Act, 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.
Using Encounter Data
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.
The health and safety of America’s patients and provider workforce in the face of the COVID-19 public health emergency (PHE) is the top priority of the Trump Administration and CMS. CMS is working around the clock to equip the American healthcare system with maximum flexibility to respond to the COVID-19 PHE. The CY 2022 Advance Notice is an example of how CMS is focused on implementing the policies that matter most for ensuring continuous and predictable payments across the health care system and ensure care can be provided where it is needed. While the Advance Notice does not catalog CMS’ actions related to the COVID-19 outbreak, an overview of CMS’ actions related to the outbreak for MA organizations, PACE organizations, and Part D sponsors can be found at: https://www.cms.gov/files/document/covid-ma-and-part-d.pdf. The agency is also communicating with stakeholders and developing further guidance, as needed, on issues related to the COVID-19 PHE.
Part I of the Advance Notice may be viewed through: https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.html and selecting “2022.”
To submit comments or questions electronically, go to www.regulations.gov, enter the docket number “CMS-2020-0093” in the “search” field , and follow the instructions for ‘‘submitting a comment.’’ To be assured consideration, comments on the proposals announced today should be submitted by November 13, 2020.