BMA Asks CMS to Rethink Medicare Advantage Risk Adjustment Model Changes

Better Medicare Alliance (BMA) has urged the Centers for Medicare and Medicaid Services (CMS) not to finalize its proposed changes to the Medicare Advantage risk adjustment model, stating that they would negatively impact providers, health systems, and beneficiaries.

The organization submitted comments to CMS Administrator Chiquita Brooks-LaSure in response to the 2024 Medicare Advantage Advance Notice. According to BMA, the proposed policies included in the notice would reduce payments to Medicare Advantage, raise costs, and reduce benefits for beneficiaries.

Specifically, the organization raised concerns about the proposed changes to the risk adjustment model. CMS proposed to update the risk adjustment model by clinically reclassifying the hierarchical condition categories (HCC) to reduce the impact of coding intensity on risk scores. The agency proposed removing over 2,000 unique codes from the HCC model, impacting conditions like major depressive disorder, diabetes with chronic conditions, and cardiovascular disease.

CMS estimated that these modifications would lead to a 3.12 percent reduction in 2024 Medicare Advantage payments.

“These proposed changes counteract with the goals of the risk adjustment program, which are to ensure that payment incentives are properly aligned so that Medicare Advantage plans can provide coverage and care to meet the health care needs of all populations, especially Medicare beneficiaries with chronic conditions,” BMA wrote. “As a result, these changes could jeopardize the substantial progress made in improving care and outcomes for beneficiaries.”

Reducing payments to Medicare Advantage plans and providers who deliver coordinated care to beneficiaries also hinders the movement toward value-based care, especially for provider organizations in risk- and value-based contracts with Medicare Advantage plans, the letter stated.

If CMS finalizes the changes to the risk model, premiums would rise and benefits would be reduced by an average of $540 per beneficiary per year, leading to higher out-of-pocket costs, BMA said.

The organization urged CMS not to move forward with the changes and instead work with stakeholders to make clinically based revisions to the model.

The comments also noted concerns about the impact associated with the one-time technical adjustment CMS is making to the calculation of the growth rate. The agency proposed a one-time correction to account for the removal of graduate medical education (GME) costs. Removing these costs would lower the fee-for-service spending growth rate by 2.13 percent.

BMA recommended that the proposed changes impacting the annual growth rate be phased in to minimize disruption and maintain stability in the Medicare Advantage program.

BMA also joined 40 organizations, including America’s Physician Groups and AMGA, to send a separate letter to CMS encouraging the agency to reconsider the changes to the risk adjustment model.

“The changes CMS proposes in the CY 2024 Advance Notice to risk adjustment go far beyond variations in coding and threaten the advancements and achievements made over the last decade that could disproportionately impact the very populations CMS seeks to protect and support,” the organizations wrote.