CMS proposes risk adjustment updates to Medicare Advantage: 5 things to know

CMS released its first round of proposed updates to Medicare Part C and Part D payment policies Jan. 6.

Five things to know:

1. Part 1 of the 2021 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies proposes changes to the Part C risk adjustment model and the use of encounter data.

2. Under the proposal, CMS proposes to calculate risk scores for 2021 by using the sum of 75 percent of the risk score calculated with the 2020 CMS-Hierarchical Condition Categories model and 25 percent of the risk score calculated with the 2017 version of the model. For 2020, CMS calculated risk scores using the sum of 50 percent of each model.

3. CMS also proposed changes to how it uses encounter data, or diagnostic information, in the risk adjustment calculation process. For 2021, CMS wants to calculate risk scores for Medicare Advantage plans by summing 75 percent of the encounter data-based risk score with 25 percent of the Risk Adjustment Processing System-based risk score. For 2020, CMS calculated risk scores using the sum of 50 percent of each type of data.

4. CMS is taking comments on the changes through March 6, 2020.

5. Payment policies for 2021 will be finalized in an annual rate announcement scheduled for April 6.

Read the full factsheet here.

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