5 takeaways from the 2023 Medicare Advantage and Part D Final Rate Announcement

The Facilities for Medicare & Medicaid Providers (CMS) has finalized vital threat adjustment and Star Scores updates for 2023 within the Medicare Benefit (MA) and Half D Ultimate Price Announcement. Key areas of focus for MA plans embrace the:

• Main 8.5% anticipated common enhance in income
• Coding depth adjustment remaining on the minimal 5.90%
• Elevated weight of affected person expertise measures for Star Scores
• Use of 2016–2020 threat scores to calculate the normalization issue
• Integration of social determinants of well being (SDoH) into Medicare threat adjustment

The desk beneath compares key figures from the ultimate 2023 Price Announcement, the 2023 Advance Discover, and the 2022 Price Announcement.

*No enhance above statutory minimal of 5.90%.

General cost enhance doubles over 2022 Price Announcement

Most importantly, the anticipated common change in income for 2023 of 8.5% greater than doubles the 4.08% enhance for 2022, and likewise exceeds the 7.98% enhance proposed within the 2023 Advance Discover considerably. This main enhance to plan income displays CMS’s ongoing dedication to the well being and wellbeing of the MA program and its beneficiaries.

As famous in an announcement by the Higher Medicare Alliance, “it is a Price Announcement that places beneficiaries first and ensures stability and continuity of look after the greater than 28.5 million seniors and people with disabilities who select Medicare Benefit nationwide.” With 42% of Medicare beneficiaries now enrolled in an MA plan and the Congressional Funds Workplace projecting this determine to achieve 51% by 2030, MA plans will proceed to play an more and more pivotal function in caring for Medicare beneficiaries, and the income enhance set forth within the 2023 Price Announcement displays this truth.

Coding depth adjustment stays at statutory minimal

Every year, CMS units the coding depth adjustment to replicate variations in coding patterns between MA plans and suppliers underneath fee-for-service Medicare. When this charge is elevated, it lowers the general weighted threat adjustment issue (RAF) rating for MA plans.

As with the 2022 Price Announcement, CMS has once more elected to maintain the coding depth adjustment set on the statutory minimal of 5.90%. In commenting on this within the 2023 Advance Discover, AHIP praised the choice, noting that “this method will assist MA plans preserve premiums low and supply the vital supplemental advantages that seniors more and more worth.” Nonetheless, in accordance with CMS, different commenters advised that quite than apply a common coding sample adjustment, the company ought to take a extra focused method that acknowledges that “coding patterns throughout the MA panorama are heterogeneous and that failure to acknowledge these variations throughout plans by making use of an across-the-board coding sample adjustment may end in an inequitable final result.”

In the end, CMS indicated that it has “discovered the minimal adjustment, as established and up to date in statute through the years, enough to replicate the variations in coding patterns between MA plans and suppliers underneath Elements A and B which are indicated in our annual evaluation.”

Affected person expertise in Star Scores takes on greater weight

In final 12 months’s ultimate rule, CMS finalized its plan to extend the burden of affected person expertise measures from 2 to 4 for the 2023 Star Scores. In its feedback on the 2023 Advance Discover, AHIP urged the company to situation an interim rule sustaining this weight at 2, noting the COVID-19 public well being emergency may proceed to impression affected person expertise survey and response charges. Nonetheless, CMS confirmed in its ultimate Price Announcement that the burden enhance will proceed as deliberate.

Now’s the time for MA plans to step up their recreation relating to member engagement. New, progressive methods are wanted to achieve members for improved survey completion charges, together with a mixture of outreach throughout telephone, electronic mail, textual content, interactive voice response, and safe internet portals. MA plans must also spend money on bettering all touchpoints of the member journey starting with enrollment.

Trade feedback on normalization issue adjustment

In responding to the Advance Discover, AHIP raised a number of issues round CMS’s proposal to exclude calendar 12 months (CY) 2020 utilization knowledge (2021 threat scores) to calculate the 2023 normalization issue, as a substitute as soon as once more using CY 2015–2019 knowledge as accomplished final 12 months. In line with AHIP’s evaluation, if CMS have been to make use of CY 2016–2020 utilization knowledge to calculate the normalization issue as a substitute, it will end in a constructive adjustment to threat scores quite than unfavorable.

Within the ultimate Price Announcement, CMS acknowledged this concern however maintained its place:

CMS believes that the inclusion of the 2021 threat rating within the slope calculation will end in a projected threat rating (i.e., normalization issue) that’s considerably beneath what the precise common FFS threat rating is more likely to be in 2023. The proposed method maintains the steadiness of utilizing our longstanding five-year linear slope methodology (utilizing 2016–2020 FFS threat scores for the CY 2023 calculations) whereas balancing the impression of the pandemic on the normalization issue projection and the progressive enhance in threat scores evident within the historic development previous to 2021. 

The COVID-19 pandemic has elevated complexity and uncertainty for Medicare threat adjustment, and that is more likely to proceed effectively into the long run. To assist mitigate these elements, well being plans ought to proactively spend money on potential threat adjustment capabilities together with in-home assessments in addition to digital medical knowledge acquisition. By partnering with a vendor that has preestablished interoperability with EMR/EHR techniques, MA plans can enhance threat scores and achieve a aggressive benefit on this more and more troublesome market.

Integration of SDoH into threat adjustment attracts reward and concern

In feedback submitted to CMS, AHIP famous MA plans’ dedication to bettering well being fairness and recognizing the function that social and financial elements play in a person’s holistic well being standing. Nonetheless, the commerce group additionally famous a number of issues round each gathering and appearing on SDoH knowledge, together with the event of requirements for SDoH knowledge assortment and sharing in addition to the infrastructure wanted to gather, retailer, and share this knowledge.

Within the ultimate discover, CMS summarized further issues raised throughout the public remark interval as effectively, noting that it’s going to take these feedback into consideration because it develops threat adjustment mannequin modifications for future years:

Just a few commenters voiced concern about including SDoH to the CMS-HCC threat adjustment mannequin, requesting that CMS contemplate whether or not threat adjustment is probably the most acceptable strategy to assist actions selling well being fairness. One commenter posited that funding within the healthcare supply system will likely be required to handle well being fairness issues and noticed that the intent of CMS adjusting threat scores to account for SDoH impacts on healthcare would appear to be to offer the extra funds that could possibly be used to enhance supply system effectiveness, however the commenter famous, there is no such thing as a assure that the extra funds can be used for such functions. A few commenters highlighted that care coordination throughout a affected person inhabitants is difficult as a result of the mandatory data expertise infrastructures that enable for suggestions loops and evaluation of outcomes are sometimes not obtainable.

As CMS, the Nationwide Committee for High quality Assurance (NCQA), and others proceed to develop requirements for SDoH assortment, MA plans should preserve well being fairness as a guideline on the forefront of program and cost mannequin design and implementation. Though industrywide requirements are nonetheless being labored out, MA plans ought to contemplate options that allow multichannel member engagement to gather this knowledge in addition to design each supplier and member incentive packages to facilitate its seize.

General, the 2023 Price Announcement is welcome information to the MA plans entrusted with caring for 29 million seniors all through america. Through the use of this elevated income to assist enhance threat rating accuracy and premium accuracy in addition to create an ecosystem the place their members have significant interactions with their suppliers to have their care gaps closed for higher well being, plans will notice success at present’s hyper-competitive MA market.