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CMS Finalizes Medicare Advantage Rates

On Monday, the Centers for Medicare and Medicaid Services (CMS) published the 2020 Medicare Advantage Rate Announcement and Final Call Letter. The publication increases payment rates by 2.53 percent, up from the 1.59 percent published in the proposed draft; increases reliance on encounter data for risk adjustment purposes; and includes guidance for Advantage plans for providing supplemental benefits to chronically ill enrollees.

The 21st Century Cures Act requires that CMS ensure that the number of conditions an enrollee has is reflected in the risk adjustment model. For plan year 2020, CMS is blending 50 percent of the prior risk adjustment model with 50 percent of the new “alternative payment condition count” model. In addition, CMS will continue phasing in encounter data as the source for determining diagnoses. Until now, diagnostic information for risk scores has come primarily from the Risk Adjustment Processing System (RAPS) (and fee-for-service (FFS) Medicare data). Diagnostic information from encounter data will account for 50 percent of the risk score used in the 2020 calculation.

For Programs of All-Inclusive Care for the Elderly (PACE), CMS will use the 2017 CMS-Hierarchical Condition Category (HCC) risk adjustment model and associated frailty factors to calculate risk scores. This is consistent with the proposal published in the Advance Notice. CMS will continue to calculate Part C, Part D, and End Stage Renal Disease (ESRD) risk scores for PACE organizations by pooling risk adjustment-eligible diagnoses from encounter data, RAPS, and FFS claims (with no weighting) to calculate a single risk score.

The CMS Fact Sheet on the 2020 Advantage Rates and Final Call Letter is available here. The full document is available here.

CMS will hold a stakeholder call on Wed., April 3rd at 3 p.m. to discuss the final release. To join the call, dial 1-877-251-0301 and use conference ID 98-69-658. Because CMS calls require operators to check in participants, it is advisable to call 15 minutes in advance.

LeadingAge NY Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841