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Amid changes to Medicare Advantage’s risk adjustment model, the current administration is proposing an increase of 1.03% to the program and Part D plan payments. Apart from this, the Centers for Medicare & Medicaid Services (CMS), also plans to transition from ICD-9 to ICD-10 in the Internal Classification of Diseases, the new system has been in place since 2015 and is used by more physicians.
The goal of these proposed changes, according to Meena Seshamani, CMS Deputy Administrator is to ensure that these programs continue to meet a golden standard of care for beneficiaries.
The company is working to make technical changes to ensure that payments are up-to-date and accurate and this includes trying to update the fee-for-service data used amid the risk adjustment model from 2014-15 to 2018-19.
Although CMS expects an approximate growth rate of 2.1%, it has an estimated 3.12% decline in payments even after taking into account the changes to the risk adjustment model.
The 2024 Advance Notice for the Medicare Advantage and Part D Prescription Drug Programs is connected to the Risk Adjustment Data Validation (RADV) final rule CMS has recently introduced which addresses issues in which there are no diagnoses supporting codes. Thus, the proposed reforms are designed with the intent to reduce the sensitivity of the model to coding variation.
In a letter written to CMS in early 2022, the Medicare Payment Advisory Commission highlighted how the coding intensity adjustment fails to make up for differences in coding between MA and fee-for-service. This is because, unlike the case with traditional Medicare, MA actually has a financial incentive to code more diagnoses.
Studies conducted by the Health and Human Services Office of Inspector General have also revealed how diagnoses reported by MAOs are not always corroborated by the medical records of Medicare Advantage enrollees. This essentially means that there is not only an increased burden on taxpayers but on the overall program costs too because billions of dollars are wasted in overpayments.
Concerns regarding these proposals however have been raised by AHIP CEO Matt Eyles who said, “We are concerned with the potential adverse impact of the rate notice on seniors and people with disabilities, especially when taken together with the final risk adjustment data validation (RADV) rule and other policy changes proposed for next year. We will carefully review and analyze the details of the proposed notice and provide comprehensive, constructive feedback to CMS during the comment period to reinforce that CMS should not finalize payment policies that increase costs and/or reduce benefits for MA enrollees, especially when healthcare cost and inflationary pressures remain high.”
The new notice expands on a similar proposal issued late last year that called for ratings to account for health equity.
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