In early February 2022, the Centers for Medicare and Medicaid Services (CMS) released its proposed payment policy changes for Medicare Advantage (MA) and Part D drug programs in 2023, which will provide more choices and affordable options for consumers. The proposal, the Calendar Year (CY) 2023 Advance Notice of Methodological Changes for MA Capitation Rates and Part C and Part D Payment Policies, notes that it expects a 4.75% effective growth rate and 7.98% expected average change in revenue.
2023 Part C Risk Adjustment
CMS plans to continue the CY 2022 policy to calculate 100% of the risk score using the 2020 CMS-HCC model, and to continue calculating risk scores using diagnoses directly from MA encounter data submissions and fee-for-service claims.
2023 End Stage Renal Disease Risk Adjustment
CMS noted that it uses a separate model to calculate the risk scores applied in payment for the Part A and Part B benefits that are provided to beneficiaries in End Stage Renal Disease (ESRD) status when enrolled in MA plans, Program of All-Inclusive Care for the Elderly organizations, and certain other demonstrations. CMS is proposing to implement a revised model for payment to MA organizations for enrollees in ESRD status and intend to use that revised model for organizations other than Program of All-Inclusive Care for the Elderly organizations.
Medicare Advantage Normalization Factor
CMS is proposing to use the methodology typically used for calculating the normalization factor, projecting the payment year risk score using five historical years of FFS risk scores under the payment year model. However, CMS typically uses the most recent years of available FFS risk scores to calculate the trend but for CY 2023, CMS proposed not to update the years in the trend based on concerns that the changing use of services in 2020 because of the COVID-19 pandemic resulted in an anomalous 2021 risk score, which would result in a projection that significantly underestimates what the 2023 risk score is likely to be. Instead, CMS proposes to use the same years of FFS risk scores that were used to calculate the slope for the 2022 normalization factors, 2016 through 2020.
Star Ratings
CMS also outlines information and updates with respect to the Star Ratings. For example, the Advance Notice includes information about the date by which plans must submit their requests for review of the appeals and complaints measures data, lists the measures included in the Part C and D Improvement measures and the Categorical Adjustment Index for the 2023 Star Ratings, and lists the states and territories with Individual Assistance designations from the nationwide FEMA major disaster declarations.
CMS Comments
“Our goals for Medicare Advantage mirror our vision for CMS’ programs as a whole, which is to advance health equity; drive comprehensive, person-centered care; and promote affordability and the sustainability of the Medicare program,” said CMS Administrator Chiquita Brooks-LaSure. “Today’s Advance Notice is one tool to engage our Medicare Advantage and Part D plan partners, and the communities we serve, as we work toward these goals.”
“The Health Equity Index we seek comment on would enhance the Star Ratings program, creating transparency on how Medicare Advantage plans care for our most disadvantaged beneficiaries, and providing an opportunity to encourage improvements in their care,” said CMS Deputy Administrator and Director of the Center for Medicare Meena Seshamani, MD, PhD. “We are looking for input from our community and partners on this index, which would keep with our commitment to transparency and follow our guiding principle to advance health equity.”
How to Submit Comments
The proposal is open for comments for thirty days, and CMS is seeking input on a potential change to the MA and Part D Star Ratings that would consider the way each plan advances health equity. CMS is also asking for input on including a quality measure in those same Star Ratings that would assess how often plans are screening for health-related social needs (i.e., food and housing insecurity and transportation difficulties).
CMS would also like input on how to assess the impact of using sub-state geographic levels of rate setting for enrollees with end stage renal disease. Specifically, CMS would like comments regarding the impact of MA payment on care provided to rural and urban underserved populations and how such payment changes may impact health equity.
Other areas that CMS would like input on include: a variety of payment updates; a new measure concept to assess whether/how MA plans transform care by engaging in value-based models with providers; and updates to risk adjustment models to continue appropriate payments for enrollees in MA and Part D plans.
The CY 2023 Advance Notice for Medicare Advantage and Part D Plans is open for comment through March 3, 2022. The Medicare Advantage and Part D payment policies for 2023 will be finalized in the 2023 Rate Announcement, scheduled to be published by April 3, 2022. As mentioned above, CMS is specifically requesting comments through a health equity lens on the approach to future potential changes.