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CMS Proposes Risk Adjustment Changes for Medicare Advantage Plans in 2020

Also extends comment period on MA audit program

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The Centers for Medicare & Medicaid Services (CMS) has issued Part I of its 2020 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part D Payment Policies, including proposed updates to the risk adjustment model for capitated payments for MA plans, as required by the 21st Century Cures Act.

CMS proposes to implement a risk adjustment model that takes into account the number of conditions a beneficiary has — a proposal made, but not finalized, in the 2019 rate announcement. The advance notice also seeks comments on an alternative risk adjustment model that includes additional condition categories for pressure ulcers and dementia. In addition, CMS proposes to increase the use of encounter data in determining the risk score under the new model. Proposed changes would be phased in over three years.

Comments on Part I of the advance notice are due Feb. 19. CMS will propose changes to other MA payment methodologies for 2020 in a separate advance notice, which is expected to include a 30-day comment period.

In a separate proposed rule, CMS has extended the comment period on provisions related to risk adjustment validation audits in its proposed rule updating MA and Medicare prescription drug benefit (Part D) programs for contract year 2020. The comment deadline for those provisions has been extended from Dec. 21, 2018, to April 30.