Stakeholder Groups Oppose Medicare Advantage Risk Adjustment Changes

Since CMS released the 2024 Medicare Advantage Advance Notice in February, healthcare stakeholders have not been silent about their concerns with the proposed risk adjustment model changes.

CMS proposed removing more than 2,000 unique codes from the hierarchical condition category (HCC) model to reduce the impact of coding variations on risk scores. These codes cover a variety of conditions, including depressive disorder, cardiovascular disease, rheumatoid arthritis, and diabetes with chronic conditions.

The agency said that the coding of the conditions was inconsistent across Medicare Advantage and Medicare fee-for-service; therefore, including them in the risk adjustment model could lead to distorted marginal costs estimated by the model.

The five-week comment period on the Advance Notice ended on March 6, but the Advance notice has received significant pushback from the payer and provider industries.

Organizations have urged CMS not to finalize these changes to the risk adjustment model, stressing that they could adversely impact the shift to value-based care and care access for people with chronic conditions.

Dozens of healthcare stakeholder groups have called on the agency to delay the proposed changes until the effects on beneficiaries, providers, and payers can be fully understood.

“The Agency should reconsider the removal of codes from the HCC model, as it may have significant downstream fiscal implications for providers as well as enrollee access to services. CMS should extend the deadline for implementation, and in the meantime, work with stakeholders to project potential impacts on providers and patients prior to removing codes from the HCC model,” Jerry Penso, MD, MBA, president and chief executive officer of the American Medical Group Association, said.

America’s Physician Groups and the Medical Group Management Association have asked CMS to pause the implementation and provide stakeholders with additional information about the changes and their impacts. Health plan groups have also requested more time to assess the changes.

“[M]any plans feel strongly that circumstances necessitate additional time and further information and are requesting a one-year delay of the reclassification portion of the risk-model update,” wrote Ceci Connolly, president and chief executive officer of Alliance of Community Health Plans.

“It remains imperative that health plans maintain the ability to strengthen benefit design and value-based care delivery that meet the needs of consumers and communities. CMS should work closely with health plans to move forward with the timely implementation of a revised risk adjustment while mitigating the impact on consumers.”

Many organizations have encouraged CMS to collaborate with stakeholders to discuss how the changes may hurt vulnerable populations.

“While the proposed changes appear to make significant progress on this goal, they also appear to have some unintended consequences for beneficiaries more likely to have the conditions involved, including more serious or complex forms of these conditions that are more costly to manage, creating offsetting reductions in the accuracy of risk adjustment,” leaders from the Duke-Margolis Center for Health Policy wrote.

“We strongly encourage CMS to use this opportunity for stakeholder engagement to take further steps beyond short term patches to its methodology, especially since these patches appear to complicate moving to an accurate, clinically based risk adjustment methodology.”

CMS also estimated that the risk adjustment model changes would lead to a 3.12 percent reduction in 2024 Medicare Advantage payments. Reducing payments to Medicare Advantage plans and providers who deliver coordinated care to beneficiaries hinders the movement toward value-based care, Better Medicare Alliance said.

The Association for Behavioral Health and Wellness, National Health Council, SNP Alliance, Nevada Chronic Care Initiative, Nevada Latin Chamber of Commerce, Pennsylvania Association of School Retirees, and Fayette County Chamber of Commerce in Georgia all expressed similar opposition to the Advance Notice.

Additionally, 73 healthcare organizations penned a letter urging CMS to reconsider implementing the risk adjustment changes.