Payer Orgs Respond to CMS Medicare Advantage Advance Notice

Payer organizations such as AHIP and the Alliance for Community Health Plans (ACHP) have raised some concerns in their comments on the advance notice of methodological changes for Medicare Advantage capitation rates and payment policies in 2023.

In the fact sheet about the advance notice, CMS proposed leaving 2020 data out of the fee-for-service normalization adjustment. The agency has excluded 2020 data for other adjustments in order to account for the impact of the pandemic.

However, AHIP argued that it was unclear whether leaving out 2020 data for normalization was a necessary step. The payer organization noted that CMS took this route on the assumption that 2023 risk scores would align with trends before the coronavirus pandemic, but the agency had not substantiated this assumption. 

AHIP echoed its previous recommendations around provider diagnoses. The payer organization stated that risk scoring diagnosis data around non-curable chronic conditions during the pandemic should be replaced with data that reflects previous years’ trends. 

The organization also renewed its call for audio-only telehealth diagnosis codes to count toward risk scoring. CMS can use prescription data as evidence for diagnosis codes, AHIP added.

CMS should adjust the weight of patient experience in the Medicare Advantage Star Ratings methodology, AHIP recommended. 

The pandemic may have profoundly influenced patient experience in abnormal ways. Patient experience surveys that influence star ratings could reflect those abnormalities. AHIP found that CMS had not accounted for those irregularities.

In May 2020, CMS finalized changes to Part D and Medicare Advantage Star Ratings systems by giving member experience more weight. For the 2022 star ratings measures, improvement measures had the greatest weight, while patient experience came second-to-last in weighting with a weight of two.

For 2023, however, CMS increased the weight of patient experience quality measures from two to four.

“We renew our call for CMS to issue an interim final rule with comments (IFC) that maintains the weighting of patient experience/complaints and access measures at 2 for 2023 Star Ratings,” AHIP urged. 

“Given the potential impacts on provider and plan performance on a variety of measures across different geographies, we urge CMS to extend its COVID-19 disaster relief policy and special rules through an IFC to all applicable measures for 2023 Star Ratings.”

AHIP continued to push back on the CMS benchmark calculation methodologies for Parts A and B fee-for-service costs and end-stage renal disease (ESRD) payment methods. 

CMS changed the methodology in 2020, despite the payer industry’s objections. Organizations including AHIP and Better Medicare Alliance opposed the change at the time, arguing that the cost carve-outs could drive metropolitan premiums higher.

AHIP pointed to studies that indicate that the current payment methods do not reimburse health plans accurately for the costs of ESRD treatment. Although CMS analyzed state-based rates for geographic impacts of the payment methodology, the agency did not make any changes based on the findings.

AHIP also offered considerations for the proposed health equity index. The payer organization noted that CMS could coordinate its efforts with organizations such as NCQA, which already offers health equity accreditation for health plans. AHIP sought more specifics on the index and recommended piloting the concept.

ACHP expressed similar reservations about the advance notice.

The payer organization added that CMS should consider moving toward encounter data for risk adjustment. ACHP argued that using encounter data would allow CMS to dispose of the normalization factor altogether, making the concerns about including 2020 data a moot point.

Regarding ESRD payment methodologies, ACHP suggested using a quality bonus payment percentage to increase payments for high-quality health plans.

The payer organization also responded to the health equity index which CMS proposed. The organization urged CMS to slowly integrate health equity measurements into the star ratings system.

“Should CMS move forward with this proposal, ACHP does not support replacing the reward factor with a health equity index, reiterating our stance that this data collection requires significant operational processes that need to be vetted prior to such a proposal,” ACHP explained. 

“We agree with the need for improved data collection and evaluation, but ACHP is concerned that a rapid approach to data collection and measurement may noy produce the most successful behavior modification incentives to truly incent closing equity gaps and improving health outcomes.”