On April 1, 2019 the Centers for Medicare and Medicaid Services (“CMS”) released the 2020 Medicare Advantage Rates and Final Call Letter (“Final”). The Final contains information covering rates, benefits, cost sharing, Star Rating changes, and Display measures. In addition, the Final includes themes around functional status and social determinants of health, changes to risk adjustment, integrating new technology, supplemental benefits, and opioid crisis intervention and program development.

These changes signal a continued shift in creating a more competitive Medicare Advantage market and support more relevant plan offerings needed and utilized by beneficiaries. The following covers some of the key changes that impact Icario and its clients.

Rates and Risk Adjustment

CMS has announced a 5.62% growth rate as opposed to the Advance Notice’s 4.5%. With other combined values, CMS expects this to translate into a 2.53% change in revenue (the Advance Notice estimated 1.59%).

To continue to take into account plan variability in beneficiary condition and diagnosis and begin phasing in required changes from the 21st Century Cures Act, CMS is changing the CMS-HCC Risk Adjustment Model. CMS has adopted the Alternative Payment Condition Count (“APCC”) model for the risk score calculation that takes into account the number of conditions per individual, and makes an additional adjustment as the number of conditions increases. This model includes additional condition categories for pressure ulcers and dementia. The purpose of the change is to increase the accuracy of prediction by count of payment.

CMS will phase in the new model in 2020 by blending 50% of the 2017 risk adjustment model (RAPS and FFS claims) and 50% of the new risk adjustment model. In addition, CMS is beginning to calculate risk scores by blending 50% of the risk score using diagnosis from encounter data, RAPS inpatient diagnosis, and FFS diagnosis with 50% of the risk score with diagnosis from RAPS and FFS.

Pre-ACA Rate Cap

The industry has consistently expressed concern on the pre-ACA rate cap imposed on high quality plans. The purpose of this is to prevent benchmarks from exceeding the pre-ACA benchmark levels. However, the impact of this is that high quality MA plans with four or more Stars, normally eligible for a quality bonus payment (“QBP”), now do not receive it for the plans that operate in a capped county. Advance Notice and Draft Call Letter (“Draft”) comments requested that CMS exercise discretion in removing the cap in certain circumstances; however, CMS declined saying no authority exists to exercise such discretion.

Star Rating Changes

Similar to the Draft, CMS is implementing several measure updates to 2020 Star Ratings regarding Medication Adherence for Cholesterol Statins, MTM Completion Rate for Comprehensive Medication Reviews, Medication Adherence for Hypertension/Diabetes/Cholesterol, Statin Use for Diabetics, and Improvement Measures.

CMS is also adopting the proposed new measures outlined in the Draft to be added to the 2021 and beyond plan year. Further, and consistent with its focus on Social Determinants of Health (“SDoH”), CMS desires to continue testing social stratification and disability status in the Medication Adherence Patient Safety Reports to Part D sponsors.

For more information about social determinants of health, how they affect different populations, and what health plans can do to address them head on, check out this episode of the RadioRev podcast.

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Rulemaking Requirements

CMS is adopting its rulemaking authority requirements outlined in the Draft which, rather than creating new and making modifications to measures through the Call Letter, requires substantive changes be done through the Administrative Procedures Act’s formal rulemaking process. However, feedback on measures will still be requested through the Call Letter process.

Changes to and Removal of Measures

CMS outlined in its Draft a proposal to eliminate the fourth factor in Care for Older Adults—Function Status Assessment Indicator. Due to the impact that removing the fourth factor will have on measure scores, and industry feedback to NCQA, the proposed change will be adopted for HEDIS 2021. The measure would then be moved to the Display Page for the 2022 and 2023 Star Ratings.

CMS is also proceeding on its proposal in the Draft to remove the Adult BMI Assessment beginning in the 2020 measurement year. Since plans are consistently operating at a high average performance this measure is no longer necessary.

CMS Feedback Requests

CMS uses “interoperability-sensitive” measures for Parts C and D Ratings and, as such, these measures are impacted by interoperability. The comments to CMS questions in the Draft regarding interoperability reflect the industry sentiment that it needs to focus on the necessary infrastructure rather than interoperability. As such, CMS will continue to focus on how interoperability measures can be added to the Star Ratings to ultimately begin measuring plans on their ability to share and efficiently transfer data.

As outlined in the previous article CMS News Alert: Key CMS Draft Advance Notice and Call Letter Proposals, CMS is continuing to seek feedback on the previously listed Patient Reported Outcome Measures (“PROM”) that can be incorporated into the Health Outcomes Survey to measure beneficiary functional outcome status.

Other Changes

Similar to the Draft, CMS is continuing to explore testing web options for beneficiary surveys. As more measures and requirements are linked to beneficiary feedback via survey, CMS desires to continue its focus on simplifying the ability to collect and analyze such data. CMS will test survey administration options for those that do not have email or internet access to continue its automation and simplification commitments.

CMS is reaffirming its commitment to testing Value-Based Insurance Designs (“VBID”) models for 2020. Until now, the VBID model has only been tested in select states. However, beginning in CY2020, MA plans in all 50 states and in U.S. territories are eligible to apply for VBID Model Innovations. This model gives MA plans the ability to further test (1.) Benefit Designs based on Condition, Socioeconomic Status, or Both, (2.) Broader Rewards and Incentives, (3.) Telehealth Networks, and (4.) Wellness and Health Care Planning.

Last, and consistent with the Draft, CMS is reaffirming its commitment to plans for increased flexibility around supplemental benefits not otherwise covered by Medicare. CMS is adopting its proposal outlined in the Draft to expand the extent to which plans can provide Special Supplemental Benefits to the Chronically Ill (“SSBCI”). The expansion, beyond last year’s changes to supplemental benefits, now proposes SSBCI that are not primarily health related and may be offered non-uniformly across populations. CMS is addressing determinants, barriers, and gaps in care faced by chronically ill (which accounts for 73% of the MA population), and to improve health outcomes by addressing non-health related benefits that impact a beneficiary’s ability to get care.

The Final states that CMS will consider a beneficiary to have a chronic condition to the extent outlined in section 20.1.2 of Chapter 16B of the Medicare Managed Care Manual, and if the beneficiary has a condition that is life-threatening or significantly limits the overall health or function of the enrollee. The process for identifying chronically ill individuals does not need to be submitted with the bid. However, plans must document their rationale and determination process for SSBCI eligibility.

CMS reaffirms its commitment to providing discretion and flexibility in what services and items plans may offer as SSBCI as long as it “has a reasonable expectation of improving or maintaining the health or overall function of the enrollee as it relates to the chronic disease.” Examples include transportation for non-medical needs, home meals beyond current allowed limit, food and produce, pest control, indoor air quality equipment and services, and other benefits to address social need. In addition, and different from the Draft, CMS is allowing organizations to offer items and services including capital or structural improvements as long as those items have a reasonable expectation of improving or maintaining the health or overall function of the enrollee.

The Act, which expands the types of supplemental benefits, also gives CMS the ability to allow MA plans to vary or target SSBCI based on an enrollee’s medical condition and need. It also allows consideration of social determinants or social risk factors in establishing eligibility

Consideration for Plans

There are several considerations for plans derived from the 2020 Final Rate Announcement and Call Letter. First, critical to risk adjustment is collecting accurate and complete encounter data. Plans should continue to target members for annual wellness and primary care visits. This will enable access to member health information early in the year including HCC and non-HCC conditions, HEDIS measures, and gaps in care. Targeted messaging is critical for members to take health action.

Second, CMS continues to focus on interoperability. Between the Draft and Final, there is a continued focus on the need for the industry to begin using technology to a greater extent in facilitating the transfer of information. CMS is putting for new proposals for patients to access health data, electronic information exchange across payers, API access, and promoting innovative models. It is only a matter of time that CMS begins tying performance and quality bonus payments to plans pursuit and use of technology. It is important for plans to continue to invest so that there is adequate preparation and readiness for CMS implementing new requirements.

Last, critical to SSBCI is MA plans developing criteria and documentation for determining when a chronically ill enrollee is benefit eligible. Documentation can be collected in various ways, including health assessments, that help provide information on the beneficiary’s functional status and chronic illness. Plans will need to provide supporting documentation to CMS as the frequency increases and benefits made available are more creative relative to SSBCI.

If you have questions on how to help your members take action critical to the comments above, contact Icario to learn how to get started with a health action program!