June 19 2018 | 0 Comments | 106 reads Average Rating: 3

The 2019 CMS Call Letter: Understand It. Deal with It.

by Tom Peterson in Risk Adjustment

The final Call Letter for Payment Year 2019 has arrived. Health plans not only need to understand all the details of the new Centers for Medicare and Medicaid Service's (CMS) Hierarchical Condition Category (HCC) Risk Adjustment Model outlined within the document but how to deal with these new developments as well.

Here are four features of the new model that health plans need to understand:

1. Perhaps most importantly, the new CMS HCC Risk Adjustment Model will use a blend of Encounter Data Processing System (EDPS), fee for service (FFS) and inpatient Risk Adjustment Payment System (RAPS) data. The 2017 model, on the other hand, relied upon a blend of RPS and FFS data.

2. The new CMS-HCC Risk Adjustment model, which is also known as
version 23, will also include the following elements:

  • Normalization factor set at 1.038
  • Coding intensity adjustment: 5.9%
  • No multiple condition variable for PY 2019
  • New disease conditions
  • Model recalibration (new HCC weights)
  • New disease conditions include substance abuse, mental health and chronic kidney disease

3. In the past, health plans used EDPS and RAPS data as the basis for blending. The blending of models, however, now incorporates different data sources. This new model, along with new disease conditions and new weights, presents a new complication that health plans need to account for.

4. Future trends (beyond payment year 2019) that health plans need to be aware of include the future implementation of the payment condition count model to account for a member’s multiple conditions and the potential recalibration of models using MA Current Procedural Terminology (CPT) codes, instead of FFS CPT codes. The FFS CPT codes are more robust since they drive payments in FFS. In MA, CPT codes are captured, but it’s the Dx and HCC codes that drive payment so providers/plans aren’t as incentivized to make sure CPT codes are 100% complete. As such, any recalibration based on MA CPT codes will make costs appear lower than they actually are. While these trends do not affect PY 2019, health plans should be aware of them.

In addition to understanding the new model, health plans also need to know how to succeed with it. Here are three strategies that can help:

1. Remember that it is possible to use inpatient RAPS data to cover both model versions in payment year 2019. CMS is temporarily allowing this data to count towards both models to help ease the transition to EDPS/Version 23 since plans are more comfortable with RAPS data.

2. Use analytics to better understand membership and providers. Using analytics in this manner will enable plans to identify and quantify all previously accepted HCC codes that are missing for a given payment year; discover never-before-reported HCCs based on prescription, diagnoses, and predictive logic; benchmark and compare provider group and PCP RAF average accounting patient population to find outliers; reconcile RAPS/EDPS variances; and measure data volume and address any drop-off points.

3. Use gaps in quality measure reporting to engage members. To do so, health plans should identify members with quality measure gaps, generate personalized messages for each member communication with members via their preferred channel and support providers with resources to close all gaps.

While it is quite challenging to understand the changes outlined in the letter and to implement strategies, health plans can take solace in one of the upshots of the government’s communication: The bottom line is better than expected. The percent of increase as a result of coding improvement is estimated by CMS to be 3.1%. Taking this into consideration with other changes, health plans could experience about a 6% increase in revenue.

To learn more about the 2019 Call Letter, check out the webinar entitled Call Letter Chat: Understanding and Planning for CMS’ Policy Changes.

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Author
Tom Peterson
SVP, Risk Adjustment

Tom Peterson brings more than 25 years of experience in healthcare. Prior to joining the SCIO® team, Tom was CEO and co-founder of Clear Vision Information Systems (acquired by SCIO® in 2016), which designed software and services to optimize care and revenue for plans and providers across the country.

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