CHA News

CMS Proposes Changes to CY 2021 Medicare Advantage Risk Adjustment Policies

For CFOs, government relations staff

The Centers for Medicare & Medicaid Services (CMS) has issued Part I of the calendar year (CY) 2021 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies, proposing changes to the Part C CMS-Hierarchical Condition Categories (HCC) risk adjustment model as required by the 21st Century Cures Act, which mandates a 60-day comment period. Comments are due March 6.

Specifically, CMS proposes to continue to phase-in implementation of the risk adjustment model finalized for CY 2020 for payment to MA organizations, by calculating risk scores using 75% of the 2020 CMS-HCC model and 25% of the 2017 CMS-HCC model. Currently, CMS utilizes a blend of 50% of the 2020 CMS-HCC model and 50% of the 2017 CMS-HCC model.

In addition, CMS proposes to increase the use of encounter data — rather than diagnoses submitted to CMS’ Risk Adjustment Processing System (RAPS) by MA organizations — for calculating risk scores for payment. For CY 2020, CMS proposes to calculate risk scores for payment to MA organizations and certain demonstrations by summing 75% of the encounter data-based risk score with 25% of the RAPS-based risk score. Currently, CMS uses a blend of 50% encounter data and 50% RAPS data.

CMS intends to release Part II of the Advance Notice — which will include additional proposed payment methodologies that require a 30-day comment period — by Feb 6. A final MA rate announcement for CY 2021 is expected to be issued on or before April 6. Additional information is available in a CMS fact sheet.