CMS Seeks Input on Medicare Advantage, Part D Health Equity Index

In the 2023 Medicare Advantage and Part D Advance Notice, CMS is requesting comments on the agency’s health equity index which it seeks to introduce into Part D and Medicare Advantage Star Ratings.

Additionally, the agency announced an anticipated 7.98 percent boost to revenue for Medicare Advantage plans in 2023 based on the advance notice, along with a 3.50 percent growth in risk score trend.

“Our goals for Medicare Advantage mirror our vision for CMS’ programs as a whole, which is to advance health equity; drive comprehensive, person-centered care; and promote affordability and the sustainability of the Medicare program,” said CMS Administrator Chiquita Brooks-LaSure. “Today’s Advance Notice is one tool to engage our Medicare Advantage and Part D plan partners, and the communities we serve, as we work toward these goals.”

Whereas the current model seeks to deter health plans from avoiding providing coverage for disadvantaged groups, the advance notice seeks to go a step further by incentivizing plans to actively reduce existing care disparities.

CMS is planning to create a health equity index, which would consolidate health equity performance measures for Medicare Advantage and Part D plans into one score. This is doable for disability, low income subsidy, and dually eligible groups, according to CMS. But the agency is considering other variables as well such as the Area Deprivation Index.

The score would depend upon contract performance in a health equity measure, which would be a subset score for each of the Medicare Advantage Star Ratings measures. The top third of the contract scores would receive one point, the middle third would receive no points, and the lowest third would have a point subtracted. 

For plans that have a score for at least half of the health equity subset measures, CMS would take the weighted sum of the scores to produce the final health equity index score. There might also be a reward for plans that have a low percentage of beneficiaries facing social risk factors and achieve a minimum score on the index, which would replace the current reward factor.  

“The Health Equity Index we seek comment on would enhance the Star Ratings program, creating transparency on how Medicare Advantage plans care for our most disadvantaged beneficiaries, and providing an opportunity to encourage improvements in their care,” said Meena Seshamani, MD, CMS deputy administrator and director of the Center for Medicare. 

“We are looking for input from our community and partners on this index, which would keep with our commitment to transparency and follow our guiding principle to advance health equity.”

The agency is also considering how it might stratify both process and outcomes performance data for certain disadvantaged and underserved groups across quality measures. However, CMS noted that there is a lot of nuance around this stratification process. 

For instance, it is difficult to assess which groups are represented by different quality measurement instruments such as the CAHPS survey, what level of data a quality measurement instrument can provide such as contract-level or national-level, and whether the instrument has any data to provide at all such as call center quality measurements that do not focus on beneficiary care.

Moreover, the agency is requesting input regarding how the CMS Hierarchical Condition Categories  (CMS-HCC) could better incorporate health equity. As examples, CMS put forward that the agency could request beneficiaries’ ZIP code data as part of the risk adjustment model in order to improve payment accuracy and advance health equity.

The CMS-HCC has already seen some changes regarding data over the past couple of years as the agency phased in an updated model for calculating risk scores.

According to the fact sheet, the advance notice anticipated a 4.75 percent growth rate in Medicare Advantage payment, year-to-year. CMS also foresees a 0.54 percent change in Medicare Advantage star ratings. 

Medicare Advantage coding pattern adjustment and risk model revision are not expected to change. There may be a 0.81 percent drop in normalization.

In addition to the health equity measures, the advance notice also requests feedback on how to account for the ways in which plans are screening for social determinants of health, payment updates, changing rate setting data for beneficiaries with end stage renal disease, assessing value-based care progress in Medicare Advantage, and risk adjustment model updates.

The comment period will last until March 4, 2022 and the final rate announcement will occur by April 4, 2022.

The announcement follows the agency’s release of the 2023 Medicare Advantage and Part D proposed rule, which included changes to medical loss ratio reporting, network adequacy requirements, star ratings, and more.

It also comes on the heels of a major bipartisan display of support for the Medicare Advantage program. In a letter signed by over 340 members of the US House of Representatives, policymakers urged CMS to uphold the range of benefits that Medicare Advantage plans can offer.