Proposed Changes to the CMS-HCC Risk Adjustment Model
Policy changes governing risk adjustment in plans for Medicare-Medicaid dual eligibles may soon be coming.
In response to concerns about the accuracy of the Centers for Medicare & Medicaid Services (CMS)-Hierarchical Condition Category (HCC) risk adjustment model for predicting costs of dual eligible beneficiaries, CMS recently released a Health Plan Management System (HPMS) memo stating it will evaluate how well the model performs for these beneficiaries based from concerns raised that “the model may disproportionately affect specific populations, particularly dual eligibles.”
These proposed changes will not affect the clinical relevance CMS has already included in the existing model or on non-dual eligibles. However, this new approach is a clear “win” for plans having significant numbers of full dual eligibles, both Dual Eligible Special Needs Plans (D-SNPs) and otherwise. The under-payment in the current system is pretty severe, based on the statistics in the CMS memo, and this new approach will fix that.
“This is an interesting change and will definitely have downstream impacts,” said a member of the Operational Performance team at Gorman Health Group (GHG). “There isn’t a lot of reconciliation on the Medicaid status. Health plans have to go by the designation by the state of what type of dual eligible someone is as there is no independent way to validate that level of coverage. So there isn’t any additional reconciliation which will occur. Health plans can no longer submit updates to Medicaid eligibility through the retro processer. That data is much cleaner now than in past years and is fixed quickly due to Low-Income Subsidy (LIS) status cost share implications for dual eligibles.”
Further, SNPs determine the type of dual eligible they will cover during the application process. They validate the member is eligible, based on that status at time of enrollment, but there is no submission or correction of that status. They have to use the state’s data to validate whether they are a full dual-eligible, Specified Low-Income Medicare Beneficiary (SLMB), or Qualified Medicare Beneficiary (QMB), etc.
What may be a challenge is identifying more clearly who is in what status to allow for projections and reconciliation of risk adjustment status.
I cannot stress the dire need for your Risk Adjustment team to be in constant collaboration with the core operations leaders within your organization to be sure the necessary reconciliation is occurring and that you have a solid data management and analytics strategy in place.
Initial Highlights:
a. The Impact on Partial Dual Eligibles
Some SNPs have most likely been generating some of their profits by enrolling partial duals for which the current HCC model generates some over-payment. The new model will eliminate this, and SNPs with significant partial dual populations need to start planning now.
b. Member Eligibility and Reconciliation
Beneficiaries could have months in one or more of the six sub-populations. Tracking a member’s status and the hierarchy of the status in the base year will be important as plans forecast and reconcile their risk adjusted payments. If CMS moves forward with reviewing predictive ratios for six segments as it states in the HPMS memo, it will be very important for plans to ensure they are updating a member’s Medicaid eligibility (QMBs/SLMBs, etc.) in a timely manner, which is currently a requirement, and the accuracy will be even more critical for projections and reconciliation of risk adjustment status.
Takeaways:
a. New Opportunities to Manage Trend and Control Utilization Costs
With improved accuracy for predicting cost, comes an opportunity for plans to be more targeted and efficient with their efforts to manage trend and control the utilization of those beneficiaries that are seemingly very costly (or at least are predicted to be very costly).
Processes around moving patients to and from the community and back to institutional settings will need to be seamless, clinically appropriate, and efficient. Politics and system loopholes allow facilities and health systems to game the system, keeping people in beds or reserving space in order to receive the reimbursement associated with the patient’s status. Controls will need to be put in place: Utilization Management and Compliance need to be involved to keep a close eye on patterns for both beneficiaries and providers.
Data has had a staggering increase of importance and remains an integral part of the healthcare industry. The need to have refined data management processes to ensure data integrity and quality analytics is at an all-time high. Achieving this should be at the forefront of health plans’ minds, especially with impending policy changes.
This proposed model will improve payments a little for the least expensive non-dual members, while reducing payments a little for the most expensive. But the most expensive probably have the most unreported and under-reported diagnoses, so a good risk adjustment program could compensate for the small predicted impact of this new approach.
CMS is soliciting feedback on their approach to revising the CMS-HCC risk adjustment model to better predict costs for beneficiaries based on their dual status and aged/disabled status for Payment Year 2017. If you wish to submit comments, please submit them to RiskAdjustment@cms.hhs.gov , with the subject heading “Proposed Updates to the CMS-HCC Risk Adjustment Model,” by November 25, 2015.
If you are unsure how this will affect your organization, or how to accurately communicate your ideas to CMS in two weeks, our integrated team of experts specializing in risk adjustment, analytics, compliance, pharmacy, and operations can work with your organization to ensure you have the right processes in place to ensure a timely submission to CMS. Contact us today >>
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