CMS Has Changed the Game for Medicare Advantage Reimbursement. Here’s How Plans Can Respond Effectively.


Jeremy Berk, senior vice president of Risk Adjustment Solutions for PopHealthCare and Emcara Health, shares how plans must conduct a detailed analysis of how changes to risk adjustment models impact your plan in order to set an effective go-forward strategy.

Earlier this year, the Centers for Medicare & Medicaid Services (CMS) issued a final rule fundamentally changing the way Medicare Advantage (MA) plans are reimbursed. In addition, CMS separately clarified the RADV audit program, which now increases the enforceability of penalties for plans who are not in compliance. The goals of these rulings include transitioning to ICD-10 condition categories, updating the model with more recent data and combatting coding variation while reducing opportunities to game the system.



The changes have been met with significant pushback from both provider organizations and MA plans. For better or worse, these changes are here to stay. Now the work must begin to navigate this new environment, which promises to be much more complex and uncertain than ever.

How can your MA plan keep pace with these changes to ensure you are appropriately compensated for the care you provide?

Assess Your Performance in Both Models

There are dramatic differences between the previous risk adjustment model (v24) and the newly introduced model (v28). You must have a solid handle on how the new model specifically impacts your population, based on your historic data and trends.

In total, roughly 25% of ICD-10 diagnosis codes used in the previous model are no longer included in the new one. However, just because a quarter of available ICD-10 codes disappeared from the CMS HCC model doesn’t mean your population just magically got healthier.

Here are a few examples of code changes in the new model:

  • Diabetes codes have been impacted. Risk scores for the three diabetes HCCs are constrained in the new model, meaning there is no longer additional compensation for linking diabetes to another co-morbid condition.
  • Meanwhile, there are also changes that impact vascular disease, a category which includes hundreds of codes. Two very common codes removed in the new model are peripheral vascular disease and aortic aneurisms.
  • And as a final example, we have depression. In the new model, mild cases of major depressive disorder (MDD), as well as all cases of MDD that are in remission, will not count toward risk adjustment scoring.

The bottom line here is that you must conduct a detailed analysis of how these changes impact your plan in order to set an effective go-forward strategy. This seems like an obvious place to start, but some plans are drafting next steps based on higher-level guidance from CMS versus taking a deep dive into their own data.

Documentation is King. Specificity is Key.

Do you have faith in your provider network to change documentation practices based on the new ruling? You can throw all the attention you want at coding practices, but if providers aren’t documenting effectively, you will invariably come up short. You should consider efforts to educate and train providers on the transition to the new model, particularly for high-leverage opportunities identified in your performance assessment. The potential for diagnosed conditions to fall through the cracks is tremendous.

Of course, this is another way of saying you should get back to the basics. The new model creates a higher degree of difficulty for plans to cover the cost of care. Returning to best practices such as being thorough and highly-specific with documentation is more important than ever.

Close the Loop with an End-to-End Approach

You also must be thorough with your planning. In addition to generating training materials and actionable guidance for providers, you should revisit all your care and quality programs to ensure models are adjusted for the new ICD-10 diagnosis codes. Any program focused on closing care gaps at the time of a visit and any machine learning model in play all need to be evaluated and adjusted.

Also make sure your plan is connecting the dots with an end-to-end approach. This includes ensuring care teams visiting members in the home are taking detailed notes, confirming that notes are being completely coded and just as importantly, taking the final step in the process by submitting all claims to CMS. That last part sounds simple, yet plans struggle because of process and infrastructure challenges. I’ve seen upwards of $7 million in unsubmitted claims sitting in an MA plan’s records and not in the hands of CMS.

Keep One Eye on Audit Risk

With all the complexity of navigating the rule changes and trying to protect plan revenue, it will be easy to lose sight of the RADV changes I briefly mentioned earlier. In this brave new world, there is the added risk that your efforts to transition to new codes could put you on the wrong side of an audit.

Also, remember the new RADV ruling we talked about earlier. Moving forward your plan must have very clear two-way processes, not just communicating out to providers but also verifying diagnoses by receiving input from providers. As an example, your efforts can’t focus exclusively on recapturing codes.You also have to put considerable energy into mining for codes that can’t be substantiated and thus need to be removed.

The Most Important Advice: Put Members First

At the end of the day, the most effective thing you can do also happens to be the right thing to do. Deliver high-quality care to your members, and the revenue will follow. If your plan is simply going into the home of vulnerable and underserved individuals to hunt for codes versus deliver care, you will not fare well in this new world. You also won’t be delivering the proper level of care your members deserve.

On the other hand, if you treat home-based encounters, whether In Home Assessments (IHAs) or ongoing visits by a remote care team, as opportunities to improve a person’s quality of care and quality of life, you will naturally generate the codes needed to support the financial needs of your plan in the process. You’ll also be creating a more complete picture of each member, their health needs, their SDoH needs, existing care gaps and opportunities for better support from the rest of their clinical team. Better care. Healthier bottom line. The ever-elusive win-win we always look for in healthcare.

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