The Centers for Medicare & Medicaid Services (CMS) has issued the calendar year (CY) 2021 rate announcement, finalizing Medicare Advantage (MA) and Part D payment methodologies for CY 2021. CMS estimates a 1.66% payment increase for MA plans in 2021, compared to the 0.93% increase that had been proposed.
CMS finalized as proposed the continued phase-in of the 2020 CMS-Hierarchical Condition Categories (HCC) model as required by the 21st Century Cures Act. CMS will calculate risk scores for CY 2021 payments to MA organizations and certain demonstrations as the sum of 75% of the risk score calculated with the 2020 CMS-HCC model and 25% of the risk score calculated with the 2017 CMS-HCC model.
In addition, CMS will calculate risk scores for payment to MA organizations and certain demonstrations as the sum of 75% of the encounter data-based risk score and 25% of the Risk Adjustment Processing System (RAPS)-based risk score. CMS will calculate the encounter data-based risk scores with the 2020 CMS-HCC model and the RAPS-based risk scores with the 2017 CMS-HCC model.
For Programs of All-Inclusive Care for the Elderly organizations for CY 2021, CMS finalized the proposal to continue to calculate risk scores using the 2017 CMS-HCC model by pooling risk adjustment-eligible diagnoses from encounter data, RAPS data, and fee-for-service (FFS) claims (with no weighting).
Each year, as required by law, CMS makes an adjustment to plan payments to reflect differences in diagnosis coding between MA organizations and FFS providers. For CY 2021, CMS will apply a coding pattern adjustment of 5.9%, which is the minimum adjustment for coding intensity required by the statute.