CMS Final Notice: A Clinical Perspective

CMS Final Notice: A Clinical Perspective

On March 31st, 2023, The Centers for Medicare & Medicaid Services (CMS) published the Final Rate Announcement for PY 2024. This is an update to the previously published CMS Advance Notice on February 1st, 2023.

We’ve put together a recap of these proposed changes below:

Risk Adjustment Changes

The following provides a high-level overview of the proposed model for Part C:

  • V28 has a total of 115 payment HCCs with 7,770 ICD-10 diagnoses codes mapped to these HCCs. Compare that to V24, which has 86 payment HCCs and 9,797 ICD-10 diagnoses codes mapped.

  • Some of the HCCs in the V28 model are renumbered. In part, this reflects the increase in the number of HCCs in the proposed model relative to the current model due to newly-created HCCs and the splitting of existing HCCs.

  • Revisions in MV 28 are based on the Principle 10 that is used as part of the standard evaluation of all risk adjustment models:

    Principle 10 – Discretionary diagnostic categories should be excluded from payment models. Diagnoses that are particularly subject to intentional or unintentional discretionary coding variation or inappropriate coding by health plans/providers, or that are not clinically or empirically credible as cost predictors, should not increase cost predictions. Excluding these diagnoses reduces the sensitivity of the model to coding variation and coding proliferation. 

  • HCC constraints (i.e., hold the coefficients of the HCCs equal such that each HCC carries the same weight) applied to:

    • Certain HCCs have been removed:
      • HCC 47 Protein-Calorie Malnutrition
      • HCC 230 Angina Pectoris
      • HCC 265 Atherosclerosis of Arteries of the Extremities, with Intermittent
      • Claudication
      • HCC 176 Complications of specified implanted device

    • Splitting out Congestive Heart Failure into:
      • Cardiomyopathy / Myocarditis
      • Heart Failure (3 HCCs, all same coefficient for now)
      • End-Stage Heart Failure or Heart Failure w/ Heart Assist Device

    • Adding severe persistent asthma to the Lung Disease Group

    • Peripheral Vascular and Arterial Diseases no longer hold value as they previously mapped to HCC 108 Vascular Disease

    • Major Depressive Disorder, previously mapping V24 HCC59 have diagnoses codes that no longer maps to an HCC.

Quality and STAR Ratings

  • Star Ratings measures and its focus are undergoing significant changes annually:

    • Universal Foundation

    • Continue adding and updating measures:
      • REVISE:  Breast Cancer Screening (Part C)
      • REMOVE:  Care for Older Adults (COA) – Pain Assessment
      • REVISE:  Diabetes Care – Eye exam and Blood Sugar Controlled (Part C)
      • REMOVE:  NCQA is considering potential removal of HYBRID reporting for MY 2024 and beyond
      • ADD:  NCQA is considering incorporating Glucose Management Indicator (GMI) to assess compliance
      • REVISE:  Statin Use in Persons with Diabetes (SUPD) (Part D)
      • REVISE:  Non-Substantive adherence measures to fully align with PQA
      • REVISE:  Medication Adherence for Diabetes Medication/Medication Adherence for Hypertension (RAS Antagonists)/ Medication Adherence for Cholesterol (Statins) (Part D)

    • Health Equity Index Reward

    • Aligning with NCQA, PQA, and AIR

  • Increased focus to move to digital measures and simplified reporting and reduction of chart review measures.

Final Rate Announcement: Summary of Changes 

The new model, V28, will be phased in over three years. Below is a table of the blended model and the percentages: 

Payment Year V24 V28 
2024 PY (2023 DOS) 67% 33% 
2025 PY (2024 DOS) 33% 67% 
2026 PY (2025 DOS) 0% 100% 

With the blended model, CMS has adjusted the following rates: 

  • Effective Growth Rate has increased to 2.28% vs. the 2.09% proposed in the Advance Notice.  
  • Impact of Risk Model Revision and Normalization would be -2.16% vs. -3.12% proposed in the Advance Notice. 
  • Overall expected change in revenue of 3.32% vs. 1.03% in the Advance Notice. 
  • Star Ratings updates finalized for CY 2024 include providing the list of eligible disasters for the extreme and uncontrollable circumstances adjustment, non-substantive updates to several measure specifications, and the list of measures included in Part C and D Improvement Measures and Categorical Adjustment Index for the 2024 Star Ratings to be issued later this year. 

Advantmed Analysis 

Based on Advantmed’s analysis, the new model is reflective of the MA population and focuses on accuracy and specificity of the member’s condition. Through this new model, CMS is providing an opportunity for MA plans to plan ahead for care management programs as opposed to diagnosis capture. For example, managing Diabetes programs to make up for the difference in the loss of the specificity of the HCCs. 

The proposed model changes should not affect the type of visit (i.e., telehealth versus face-to-face assessments) since, clinically, the supportive criteria of capturing the diagnosis maintains the same. Although overall the HCCs collected during an in-home assessment are more supported, there are a few exceptions with the limitations of the practitioner to assess them. This includes morbid obesity (if the member has no access to a scale during a telehealth visit), Congestive heart failure (due to the lack of auscultation of heart sounds and inability to test for some of the main symptoms such as pitting edema), and COPD (due to the lack of auscultation of the lungs and inability to perform the spirometry during telehealth). Despite these limitations, the majority of the other HCCs captured during telehealth appointments can still be well supported through the interactive video and audio forum.

There is a significant opportunity to mitigate any negative impact of the model by preparing ahead through better care coordination, focused programs, and care management.