CMS Finalizes 8.5% MA Rate Bump in 2023

The Biden administration recently completed an 8.5% increase in Medicare Part D and Medicare Advantage (MA) plan rates. The increase comes in just above the 7.98% increase projected in early 2022. Consequently, the Centers for Medicare & Medicaid Services (CMS) made known the final 2023 MA and Part D rates which contributed to 4.88% growth. The uptick in growth was a bit higher than the projected 4.75% as stated in the advance notice. When the advance notice was announced in early 2022, the application of the rebasing/re-pricing impact was not available and thus produced the change from the originally projected increase. 

MA Coding Pattern Adjustment

One thing that CMS did not change is the planned coding pattern adjustment of 5.9%. The coding pattern adjustment is designed to account for differences in diagnosis coding between MA plans and fee-for-service providers, with 5.9% being the minimum. CMS did state they had received a multitude of feedback about how to approach the MA coding pattern adjustment. An example being that they should apply a higher coding pattern adjustment than the minimum required. CMS stated in a fact sheet they will continue to review MA coding patterns and determine what the best and most appropriate level of adjustment should be. The agency also said they will consider all feedback when developing future coding pattern proposals.

Comments to increase the minimum coding pattern adjustment percentage come at a time when experts have accused some MA plans of unethical risk adjustment methods designed to artificially increase reimbursements from Medicare. CMS concluded to leave the coding pattern adjustment as is for now.        

Part C Risk Adjustment

As previously proposed and currently in effect, 100 percent of risk scores will continue to be calculated using the CMS-HCC model. Risk scores for MA beneficiaries will also continue to be calculated using fee-for-service (FFS) claims and MA encounter data submissions. CMS stated they will be assessing comments on how the impacts of social determinants of health can aid in anticipating MA beneficiary health status and in-turn help project costs.

Part D Risk Adjustment

As it previously proposed, CMS will produce a new version of the RxHCC risk adjustment model for Part D sponsors besides PACE. The revised RxHCC model consists of a clinical update to the RxHCCs using ICD-10-CM diagnosis codes instead of ICD-9-CM codes that were used in previous models.           

Star Ratings

CMS requested input on how to improve and measure health equity issues in MA and Part D star ratings. Input in this area could include ways to produce a health equity index to calculate how MA and Part D plans executed on addressing social risk factors and what affects their performance will have on their star ratings. Other areas of input could outline the framework of a measure to report if plans are compiling enrollees health-related social needs like housing, transportation or food shortages. CMS stated it will welcome all input as it considers ways to better guide care quality and health equity.  

Part C End Stage Renal Disease (ESRD) Risk Adjustment

The risk adjustment model for reimbursements to MA plans that use MA risk adjustment models for enrollees with ESRD will be revised by CMS. The revision is designed to better predict costs and will be calculated by more recent records from encounter data to identify risk adjustment eligible diagnosis. 

MA Normalization Factor

Every calendar year CMS has to calculate normalization factors to help keep FFS risk scores at an appropriate level over periods of time. For 2023, CMS said it will use the methodology typically used for calculating the normalization factor. But, in response to the COVID-19 pandemic, CMS will use the normalization factors used to calculate FFS risk scores for 2022, which were normalization factors from years 2016 to 2020.

Looking Forward

It is hard to overstate the role that health equity plays in achieving health care for all Americans. One of the most important things an administration can do to reduce disparities is to increase access to quality, affordable health plans. This will help towards reducing disparities in health and ensuring that everyone has the care they need to live a healthy life. 

 
 

For healthcare organizations looking to succeed in the transition to value-based care delivery models, ForeSee Medical is a specialized software platform designed to increase the profitability of Medicare Advantage risk contracts. Using A.I. including natural language processing, ForeSee Medical perfects HCC risk adjustment scores, empowering providers to positively influence health outcomes.

 

Blog by: The ForeSee Medical Team