July 25 2017 | 0 Comments | 138 reads Average Rating: 3

Understanding: Step One in Dealing with the Shock of CMS Call Letter Changes

by Tom Peterson in Risk Adjustment

Earlier this year, the Centers for Medicare and Medicaid Services (CMS) released the final 2018 Call Letter, which describes exactly what rules, regulations, and reimbursement Medicare Advantage (MA) Organizations will experience in the coming year. Specific to reimbursement, the communication states that health plans can expect a total change of 2.95% in revenue, when accounting for the expected growth in coding acuity. In addition, plans that improve the quality of care will continue to receive additional incentives from which they can grow and enhance the benefits they offer to enrollees.

And, therein, lies the rub. To realize revenue improvements, health plans need to adapt to the changes outlined in the letter as well as other industry pressures – a challenge that brings back thoughts of the 1970’s book Future Shock, which explores the difficulties associated with dealing with too much change in too short a period of time.

During a recent Webinar entitled Risk Adjustment Round-Up: Reviewing the CMS Call Letter and Other Trends, our expert Pam Klugman explored how healthcare plans can succeed in this continually evolving environment.

To start, healthcare organizations need to understand the why behind the changes. CMS is continuing to move beyond the concept of being seen as just a payor of claims and toward using their influence as a conduit for the delivery of high quality healthcare. To accomplish this, CMS has established a continuum of goals such as:

  • Improving the quality of individual healthcare
  • Promoting alternative payment models, thus seeking better ways to reimburse for services to beneficiaries
  • Ensuring program integrity and beneficiary/taxpayer value

Overview of Key Changes

In addition to dealing with this new focus, plans need to cope with constant changes in CMS measures. This is sometimes a difficult task as when plans get better at a particular measure or group of measures, CMS often changes or drops these measures and then adds new, more challenging requirements.

Perhaps most importantly, the CMS Call Letter indicates that Risk Adjustment Payment System (RAPS) will be valued at 85%, and Electronic Data Processing System (EDPS) will be weighted at 15% for the 2018 payment year – which represents an unexpected rollback to an increased emphasis on RAPS. In 2017, payments were weighted at 75% RAPS and 25% EDPS. The new combination is expected to hold as a temporary measure and eventually will return to 100% EDPS. The upshot is that MA plans in this scenario will need to get much better at collecting and submitting CPT codes.

In addition to these changes, the call letter delineates STAR measures additions and deletions. For example, STAR measures will now include Medication Reconciliation Post Discharge – (Part C). This measure, which CMS included on the 2017 display page, will move as a revised measure into the 2018 Star Ratings. In addition, Improving Bladder Control (Part C) will return to Star Ratings beginning in 2018. The Call Letter also calls for a couple of STAR measure deletions. High Risk Medication (HRM) (Part D) will move to the display page for 2018 (based on 2016 data). HRM measure reports will continue to be provided to Part D sponsors through the Patient Safety Analysis website and to identify outliers.

In addition, reducing the Risk of Falling (Part C) will remain in Star Ratings in 2018. However, since the National Committee for Quality Assurance (NCQA) made several changes to this measure, the revised questions will be first collected in 2018, and there will be no data for this measure for the 2019 and 2020 Star Ratings.

On top of these confirmed changes, CMS could potentially recalibrate MA reimbursement based upon current procedural terminology (CPT) codes captured by MA plans (currently they use CPT code from FFS and then apply MA risk adjustment on those costs). If this materializes, MA plans will need to get much better at collecting and submitting CPT codes.

Here, I’ve presented a high-level overview centered on what health plans need to know about the Call Letter changes. To dive into a more detailed analysis, check out Risk Adjustment Round-Up: Reviewing the CMS Call Letter and Other Trends. In addition, read my blog that further explain how you can take the specific actions needed to successfully navigate these 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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