Beneficiary-specific risk adjustment: proposed 2020 Medicare Advantage risk adjustment model changes

The Centers for Medicare & Medicaid Services (CMS) has released its advance notice of methodological changes to the Medicare Advantage CMS-HCC risk adjustment model for the 2020 calendar year. These changes are in line with the agency’s continued commitment to strengthen Medicare Advantage by promoting innovation, transparency, and program simplification as a result of combining private sector creativity with government management. Lesley Brown, Cotiviti’s vice president of Risk Adjustment, breaks down the key updates.

Payment condition count model: beneficiary-specific risk adjustment 

CMS is proposing an important change to the CMS-HCC risk adjustment model that focuses on the number of conditions an individual beneficiary may have, with the model adjusting as the number of conditions increases. This action is in alignment with risk adjustment model changes previously suggested for payment year (PY) 2019, where CMS proposed several condition count models for comparison. CMS received little support from Medicare Advantage plans and other stakeholders for an “All Condition Count” model, and some support for a “Payment Condition Count” (PCC) model. As a result, the agency deferred its decision on this, instead implementing a model without count variables for the upcoming PY 2019. CMS chose to use the remaining time in 2018 to advise stakeholders further about the proposed PCC model. 

The CMS-HCC risk adjustment model is already additive, adjusting as the number of conditions a beneficiary has increases. With the introduction of the new PCC model, risk-adjustable payment conditions will now be taken into account in two different ways: first, with a coefficient for the specific condition included in the model, and now second, with a coefficient for a variable that counts the total number of condition(s) a beneficiary has. Consistent with current methodology for member demographics and HCC variables, the lower count variables with negative coefficients are constrained to zero. The count will start between four and six payment conditions, depending on the model, and will likely cap at 10 conditions.

Alternative CMS-HCC model for consideration 

Realizing that CMS is accountable to implement a risk adjustment model that considers a beneficiary condition count by 2020, but that many stakeholders may still not be comfortable with the proposals, CMS is also offering an additional model for consideration in the current advance notice. This model is similar to the proposed PCC model, with the addition of HCCs for Dementia and Pressure Ulcers. 

These additions were the result of feedback that the proposed PCC model does not improve prediction in the CMS-HCC model for high-need beneficiaries with multiple chronic conditions, as well as analysis by CMS to identify potential chronic non-payment HCCs that were under-predicted. The HCCs for Dementia and Pressure Ulcers still meet the conditions for inclusion in the model, as they are well-specified, predict medical spend, are definitively diagnosed, and indicate significant disease burden. CMS is looking for commentary from stakeholders on the value of the differences between this alternate model and the proposed PCC model.

Timeline and encounter data as a diagnosis source 

CMS’s intent is to put these risk adjustment model changes into place over a three-year period beginning in 2019 and ending in 2022. For PY 2020, CMS is proposing to continue a phased-in approach for the model changes, calculating risk scores by blending 50 percent from the proposed PCC model with 50 percent from 2017 model. 

In PY 2020, CMS is also planning to continue the transition to the use of encounter data for risk score calculation, proposing to blend 50 percent calculated using diagnoses from encounter data, fee-for-service claims, and RAPS inpatient records under the proposed PCC model with 50 percent calculated from all RAPS records and fee-for-service claims under the 2017 model.

Time to comment 

Interested stakeholders have until February 19, 2019, to submit comments on the proposal. We encourage Medicare Advantage plan stakeholders and other interested parties to comment on CMS’s methodological changes. 

A frequently changing regulatory environment is just one of many challenges Medicare Advantage plans face in achieving timely and consistent revenue payments. Download our Risk Adjustment solution overview to learn how Cotiviti's comprehensive solution suite allows health plans to use one partner and leverage their data across the workflow to optimize both retrospective and prospective programs.  

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Lesley Brown
Lesley drives the product strategy for Cotiviti’s end-to-end Risk Adjustment solutions, ensuring that we continue to deliver innovative and compliant solutions for our customers. She has more than 30 years’ experience in product and project management in the healthcare and pharmaceutical industries. Before joining Cotiviti, she served as senior vice president of product management at Halfpenny Technologies, a leading provider of clinical data exchange solutions for healthcare providers. She also previously served as senior vice president of care management products for TriZetto, where she was accountable for the quality, delivery, and support of the software solutions in the its care management portfolio, and she held multiple positions at Alere Health. Lesley is the co-author of 10 U.S. patents and has been published in 16 peer-reviewed scientific and clinical journals.

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