CMS bumps Medicare Advantage growth rate amid COVID-19 outbreak

The Centers for Medicare & Medicaid Services (CMS) has finalized its Medicare Advantage (MA) and Part D payment methodologies for the 2021 calendar year, offering plans an effective growth rate of 4.07 percent. This final rate is significantly higher than the 2.99 percent rate proposed in February’s Advance Notice. After incorporating other changes such as a -2.54 percent normalization factor, the bottom line is a 1.66 percent expected average increase in revenue for MA plans.

For beneficiaries with end-stage renal disease (ESRD), CMS is bumping payments by 4.04 percent, which is also a higher rate than the 2.8 percent proposed in the Advance Notice. According to a fact sheet previously published by America’s Health Insurance Plans (AHIP), MA plans are expected to see an influx of enrollees with ESRD next year as a provision of the 21^st Century Cures Act lifts current enrollment restrictions. Despite criticism from AHIP, the agency will not alter its ESRD payment methodology to account for this potential increase.

CMS also finalized the proposed risk score blend it put forth earlier this year. Encounter data-based scores will comprise 75 percent of an MA plan’s overall risk score using the 2020 CMS-HCC model, while RAPS-based scores will comprise the remaining 25 percent using the 2017 CMS-HCC model.

In releasing the final rates, the agency stated “the 2021 Rate Announcement 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.” The final announcement comes as health plans face significant challenges in gathering data from overburdened providers caring for patients during the COVID-19 pandemic, leading the agency to suspend many programs.

So far, the agency’s actions impacting MA and Part D plans include:

• Eliminating the requirement to collect HEDIS^® data for the 2019 measurement year
• Removing the requirement to submit 2020 CAHPS^® survey data
• Delaying administration of the Health Outcomes Survey (HOS) to late summer
• Suspending risk adjustment data validation (RADV) activities for the 2015 payment year

CMS notes it will now use the previous year’s HEDIS and CAHPS scores to calculate 2021 Star Ratings for MA plans.

Continue to follow the Cotiviti blog as we publish updates on how the COVID-19 pandemic is impacting health plans. Looking to get up to speed on the latest ICD-10, CPT, and HCPCS codes? Read our recent blog offering several coding resources.

HEDIS^® is a registered trademark of the National Committee for Quality Assurance (NCQA).

CAHPS^® is a registered trademark of the Agency for Healthcare Research and Quality (AHRQ).