This week, Congress returns from recess to another four-week work period. The dynamics of the next four weeks might be in flux now that President Trump has nominated Brett Kavanaugh to the U.S. Supreme Court. Other issues to monitor include the suspension of risk adjustment payments and the fall out from the Kentucky Medicaid waiver ruling. We cover all this and more in this week’s preview, which you can find here. 

Late last week, CMS released the Advance Notice of Methodological Changes for Calendar Year (CY) 2019 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2019 draft Call Letter (Advance Notice and Call Letter). The Advance Notice and Call Letter should be read hand-in-hand with the Advance Notice of Methodological Changes for Calendar Year (CY) 2019 for the Medicare Advantage (MA) CMS-HCC Risk Adjustment Model (2019 MA Risk Adjustment Changes) that CMS released on December 27, 2017.  Both documents request comments from interested parties and have a submission deadline of March 5, 2018. Continue Reading CMS Releases Advance Notice and Call Letter for Medicare Advantage and Part D

Earlier this month, the Centers for Medicare & Medicaid Services (CMS) released its 2018 Medicare Advantage and Part D Advance Notice and Draft Call Letter (“Draft Call Letter”).  For the majority of the letter’s provisions, CMS is proposing to continue its current course of action and is refraining from introducing new policies.  With that said, however, CMS is proposing several notable updates, including updates to the use of encounter data for risk adjustment and the 2018 Star Ratings.  This blog is to highlight some key provisions and changes as MA and Part D plans prepare and finalize comments.

Continue Reading CMS’s Draft 2018 Call Letter: Minor Updates, but Largely a Continuation of Current Policies

Last week, the OIG posted its Work Plan for 2017.  In it, the OIG announced many goals touching on programs including, but not limited to, Medicare, Medicaid, Insurance Marketplace (Health Exchanges), Indian Health Service, TANF and Head Start.  Below are some of the OIG’s action items that Medicare Advantage and Part D plans should be aware of.  As in years past, most of the OIG’s goals relating to the Medicare program focus on whether CMS is properly administering and monitoring the programs. Although the OIG often targets CMS, this focus can result in increased OIG and CMS scrutiny for plans and plans’ first tier, downstream, and related entities. Continue Reading 2017 OIG Work Plan: For Medicare Plans

Last week, the Centers for Medicare & Medicaid Services (“CMS”) released its 2018 Notice of Benefit and Payment setting out payment parameters for the Health Insurance Marketplace for upcoming years.  With several insurers withdrawing from the Marketplace and others still threatening their departure, CMS is releasing this proposed Notice nearly two months early with significant proposals seeking to strengthen the program.

At the core of CMS’s proposals to strengthen the Marketplace are updates to the HHS risk adjustment model and methodology.  Specifically, CMS is proposing: (1) an adjustment for members who are only enrolled for part of the year; (2) the inclusion of select prescription drug utilization data in the risk adjustment model; and (3) modifications to establish transfers for costs associated with high-cost enrollees so a portion of the costs exceeding $2 million for an individual would be shared among all issuers. Continue Reading 2018 Notice of Benefits and Payment: Proposed Updates to the HHS Risk Adjustment Model

In past Call Letters, CMS has proposed and finalized significant changes to the Medicare Advantage risk adjustment system including, recalibrations, deletions and additions of diagnoses codes, and questioning of the value of in-house health risk assessments. This year’s Call Letter did not include any major changes to risk adjustment, but nevertheless the Call Letter  includes important risk adjustment information for MA plans.

First, for 2016, CMS has proposed to fully transition to use of the clinically revised CMS-HCC model introduced in 2014. This could have a significant impact on some plans’ overall risk scores, but many plans have likely been tracking their data in the clinically revised model in anticipation of this change. Alongside this change, CMS proposes to calculate each risk score using two scores, one from RAPS accounting for 90% of the score and one from EDS accounting for 10% of the score.

Second, CMS is asking for comments on proposed methods for calculating the MA coding pattern adjustment. CMS believes that MA enrollees are on average no different than Medicare fee-for-services (“FFS”) beneficiaries and therefore, beginning in 2017, is considering establishing a method to ensure that aggregate payments to MA plans are no greater than those that would have been made under the adjusted average per capita costs payment system used prior to 2000, which was prior to risk adjustment. Plans should carefully consider how this proposed methodology would affect their aggregate reimbursement and consider submitting comments to CMS. Continue Reading MA Risk Adjustment in the 2016 Call Letter and … in Health Care Fraud Charges

Last week, the Centers for Medicare & Medicaid (CMS) released its 2016 Advance Rate Notice and draft Call Letter (2016 Call Letter) for the Medicare Advantage (MA) and Medicare Part D programs. The 2016 Call Letter outlines proposed changes to the Part C risk adjustment and Part D payment methodologies, as well as policy modifications for calendar year 2016. With the final 2016 Call Letter to be released April 6, 2015, CMS is providing interested stakeholders until next Friday, March 6th to provide comments.

Starting on Monday, we will offer a 5-part series analyzing several key provisions of the 2016 Call Letter that could have a significant impact on plans, PBMs, pharmacies, and providers in the coming year.  This series will cover the following provisions of the 2016 Draft Call Letter: (i) Star Ratings; (ii) PBM and Pharmacy Issues; (iii) Risk Adjustment; (iv) D-SNPs, MMPs, and Low-Income Subsidy Issues; and (v) MA Contracting Issues.  Continue Reading CMS Releases 2016 Draft Call Letter

By Tara E. Swenson

Yesterday, CMS released its 2014 Final Call Letter for the Medicare Advantage and Medicare Part D programs. Along with the Final Call Letter, CMS published a brief press release highlighting a handful of changes to the programs. In its press release, CMS focused on changes to the Medicare Advantage Risk Adjustment payment system, its efforts to reduce Part D beneficiary out-of-pocket spending, and limits on Medicare Advantage plans’ ability to increase beneficiary costs.

We will be providing further analysis of the Final Call Letter and changes made as the result of comments to the Draft Call Letter in the upcoming week.






Written by Gary Bacher and Josh Booth

On May 7th and 8th, the Center for Consumer Information and Insurance Oversight (CCIIO) held a public meeting on risk adjustment, the process through which, under the Affordable Care Act (ACA), funds are transferred from health plans that attract relatively low-risk enrollees to plans that attract relatively high-risk enrollees, such as individuals with chronic health conditions. The risk adjustment program was created to promote greater stability and to reduce the potential for adverse selection in the individual and small-group markets. 

Senior officials from the Department of Health and Human Services (HHS) provided details regarding the approach that HHS intends to take toward risk adjustment when acting on behalf of states as well as the procedures and standards by which states that choose to administer their own risk adjustment programs can obtain certification for alternate methodologies.  Officials provided important information, including the following: 

  • HHS intends to use a concurrent model (as opposed to a prospective model) when it runs a state’s risk adjustment program.  Under this model, each individual’s risk score for a given year will be determined based on that individual’s diagnoses during that same year, rather than previous years’ diagnoses. 
  • HHS does not intend to adjust its risk adjustment calculations to account for payments that insurers might receive under the ACA’s temporary reinsurance program. 
  • HHS is considering the plan liability (as opposed to a total medical expenditure) approach to risk adjustment.  This approach attempts to take into account the different cost-sharing models that plans can have.
  • HHS is considering using a risk pool average premium (as opposed to using a plan’s own premium) for establishing the baseline premium necessary to calculate and balance payments and charges.

Data collection issues received considerable attention from both presenters and audience members.  Under a final rule released on March 16th, HHS will use a “distributed data collection” approach when it operates a risk-adjustment program in a state, which means that each individual’s claims data remains with the insurance issuer.  A state that runs its own program can use an alternate methodology, but the rule establishes standards that limit a state’s ability to collect individually identifiable information.  Many commenters expressed concern that these restrictions could preclude states from leveraging existing data systems and from collecting enough long-term data to accurately perform risk adjustment.  While the presenters provided little detail in response, they did indicate their belief that both the use of claims databases and the tracking of an individual’s claims information are feasible under the final rule.

The PowerPoint slides for the presentations can be found at: