CMS Medicare Advantage 2017 Advance Notice Summary
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1 CMS Medicare Advantage 2017 Advance Notice Summary KEY HIGHLIGHTS March 2016 Risk Adjustment Part C Coding Intensity Adjustment: 5.66% Part C Normalization Factor: Rebasing & Other Adjustments to County Premium Benchmark Rates EDS to RAPS Blend set to 50/50 for 2017 Risk Score Calculation, Both Part C and Part D CMS-HCC Community Model Segmentation by Dual Eligibility & Disabled/Aged Status No Changes to In-Home Assessment Program Guidelines The net payment of the proposed updates would result in a modest increase of 1.35% on average for MA plans, although individual plans experiences will vary. CMS statement from Advance Notice conference call, 2/19/2016. Quality Measures 2017 Five Star Rating QBP Threshold & Bonus Percentage Remains Unchanged from 2016: o Contract with less than 4 stars: 0% QBP o Contract with greater than or equal to 4 stars: 5% QBP Stars Data Integrity Enforcement: o 1 Star penalty for contracts submitting biased or erroneous data. o CMS may perform audits or reviews to ensure valid data. Categorical Adjustment Index (CAI) o An interim, positive or negative adjustment to a contract s overall and/or summary star rating based on membership % of Dual Eligible + Low Income Subsidy + Disabled Status beneficiaries. o Simulation Impact Estimates: Overall Star Rating No Star Rating Change: 97.1% Star Rating Spike of 0.5 Stars: 2.6% Star Rating Drop of 0.5 Stars: 0.2% Page 1 of 5
2 Five Critical Takeaways & Action Concepts 1. Encounter Data as a Risk Adjustment Diagnosis Source for /50 EDS to RAPS blend for 2017 Risk Score Calculation (for both Part C HCC and Part D RxHCC models) First Risk Score: 50% weight as calculated from 2016 DOS from RAPS Second Risk Score: 50% weight as calculated from 2016 DOS from EDS Risk score drops due to discrepancies between RAPS and EDS will become more pronounced with the spike in EDS share from 10% to 50%. Pulse8 estimates the net impact to RAF could reach up to -10%, depending on plan preparedness. There are two disciplines MAO s will have to master in order to realize complete risk scores from EDS. First, the technical mechanics of submitting EDS data, complimented with strong BI reporting capabilities of MAO- 004 results. Next, submitters must peel-back the onion layers within their own data operations for both RAPS & EDS output to fully understand the workflow, including embedded IT detours, and the applied data manipulations. 2. MA Employer Group Waiver Plans CMS comparative analysis of EGWP & individual plan bid rates and risk scores has revealed a paradox: EGWPs bids are higher than individual plans, yet, EGWP risk scores are lower than individual plans. CMS is proposing to waive the bidding requirements for EGWPs. Employer group MA plans would have a pre-calculated county premium based on the average benchmark bids of individual plans. Removing the bid process for EGWPs will lower average county premium rates for these plans. Additionally, these changes will create a flying blind actuarial environment for EGWPs because their premium amount will be unknown during the employer group rate-quoting timeframe. MA plans should calculate their own estimated baseline county premium amount for EGWPs, with a high confidence interval, through analytical modeling of the proposed methodology detailed in the Advance Notice. The baseline premium calculation can then be used as barometer for rate-quoting to prevent under water contracting. Page 2 of 5
3 3. Overhaul of the CMS-HCC Risk Adjustment Community Model CMS is proposing to segment the Community RA model into six subgroups based on enrollees Medicare/Medicaid dual beneficiary status and entitlement reason (disability or age). Each subgroup will have a set of relative Risk Adjustment Factors (and Disease Interaction Factors) that reflect the specific relative costs per HCC. Six Subgroups of CMS-HCC Community Risk Adjustment Model w/ Est. Avg. Enrollee Distribution 1. Non-Dual Aged: 70.0% of MA Enrollees 2. Non-Dual Disabled: 7.5% of MA Enrollees 3. Full Dual Aged: 7.5% of MA Enrollees 4. Full Dual Disabled: 7.5% of MA Enrollees 5. Partial Dual Aged: 3.5% of MA Enrollees 6. Partial Dual Disabled: 4.0% of MA Enrollees Analysis of the six subgroup RAF schedule indicates a drop in risk scores for the healthiest & largest subgroup, non-dual aged. Conversely, the least healthy subgroups, full dual-aged and full dualdisabled risk scores are set to increase. By adopting the six subgroup community model, CMS has aligned financial incentives with care prioritization. Plans should follow CMS lead and embrace this alignment by setting-up campaigns to engage the full dual-aged and full dual-disabled subgroups with blanketing intervention strategies. Page 3 of 5
4 4. RA & Five Star Program Enhancements vis-a-vis Socio-Economic Status & Behavioral Health The 2017 Advance Notice contains significant proposals that embrace societal-derived healthcare policy. CMS has put-forth program changes that address the link between economic status and behavioral health. Risk Adjustment Adoption of a new risk score model that will increase risk scores for the dual-aged and dual-disabled subgroups. A new Disease Interaction category, Psych & Substance Abuse, is being proposed for the 3 disabled subgroups within the six-tiered HCC Community model. The Disease Interaction is comprised of the following HCCs: o Psych HCC 57 Schizophrenia HCC 58 Major Depressive, Bipolar, and Paranoid Disorders o Substance Abuse HCC 54 Drug/Alcohol Psychosis HCC 55 Drug/Alcohol Abuse Quality Measures The Advance Notice advises plans that new Quality Measures are under consideration for Star application and for 2017 display status: o Depression Measures (Part C) o Appropriate Pain Management (Part C) o Use of Opioids from Multiple Providers or at High Dosage in Persons without Cancer (Part D) o Antipsychotic Use in Persons with Dementia (APD) (Part D) MA Five Star Rating program s Categorical Adjustment Index is designed to positively adjust Star Ratings for plans serving dual-eligible and low-income beneficiaries. Behavioral health conditions extensively co-treated through pharmaceutical therapy of distinct drug classes. In order to successfully monitor and activate interventions related to behavioral health conditions, it s critical that MA plans have a strong Rx data analytics process. Pharmacy claims data s key field is the drug identifier, National Drug Code (NDC). From NDC, a wealth of clinical information can be mapped and applied for medical condition inferencing; however, this NDC-associated data is not easily obtained, nor is it facile for analytics. Organizations must pair commercial-grade NDC-associated software with smart and nimble clinical informatics algorithms in order to extract the full clinical profile of their members from Rx data. Page 4 of 5
5 5. A Star Rating s Full Impact Quality Bonus Payment MA plans with a Star Rating greater than or equal to 4 will receive a 5% add-on to county premium bid rate benchmarks. Note: Benchmarks are capped at a max amount equal to rate calculated under the pre-aca rules. Qualifying County Bonus Payment Counties with a specific combination of Urban Floor status, MA Penetration Rate & 2017 FFS Rate are designated as qualified counties. MA plans with a Star Rating greater than or equal to 4 and located in a qualifying county are granted an additional 5% add-on to their original QBP 5% bonus. Note: Benchmarks are capped at a max amount equal to rate calculated under the pre-aca rules. 5 Star Year-Round Enrollment Gain Plans with a Star Rating of 5 have the additional advantage of accepting beneficiary enrollment at any time during the year, rather than only during the annual open enrollment period. Rebate Rebates are calculated, for each plan, as a percentage of the difference between the risk-adjusted service area benchmark and the risk-adjusted bid; the level of rebate is tied to the plan s Star Rating. Plans may use rebates to fund supplemental benefits and/or to buy down beneficiary premiums for Part B and/or prescription drug coverage. Star Rating 2017 Rebate % % % < % We note that the President s budget includes a provision that would remove this cap to incentivize quality improvement for all MAOs. This direct quote from the Advance Notice clearly let s plans know that MA Five Star is obviously here to stay and is sure to be amplified as a stimulus towards value model adoption within MA. Plans should double-down on Quality Measures operations, analytics and SME skill attainment via hiring or consultant engagement. A software solution that integrates Risk Adjustment and Quality Measure gap closure is mandatory by Page 5 of 5
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