On January 31, The Centers for Medicare & Medicaid Services (CMS) released the Medicare Advantage (MA) PY2025 Advanced Notice. Some of the highlights include:
- Rollout of V28 risk adjustment model from CMS-HCC Model 2024, which will now represent 67% of the calculated risk score, with 33% coming from the V24 risk adjustment model from CMS-HCC Model 2020. For PY2024, these percentages were 33% for the V28 risk adjustment model, and 67% for the V24 model.
- Special Needs Plans (SNP) market growth by 8%
- No new quality measures added for 2024; CMS is preparing to roll out updated measures for 2025
Rollout of V28 Risk Adjustment Model
Based on analysis of the impacts of the risk adjustment model, CMS has concluded that it is necessary and appropriate to continue the phase-in of the new risk model. Since those in the risk adjustment industry had to deal with the major change of a brand new V28 risk adjustment model, complete with ICD10 diagnosis mapping changes and new Hierarchical Condition Category (HCC) disease categories, this year’s Advanced Notice represents minor expected changes to the risk adjustment model, primarily increasing the blend percentage of the V28 risk adjustment model and decreasing the percentage for V24.
CMS has calculated the blended MA risk score trend for CY2025 as 3.86 percent. The 2024 Part C CMS-HCC model normalization factor for CY2025 is 1.045. The 2020 Part C CMS-HCC model normalization factor for CY2025 is 1.153.
Strong Growth in Special Needs Plans Market
CMS views the strong growth in the dual SNP market as an indication that the risk adjustment model changes have been appropriate and have not prevented MA plans from continuing to grow and be successful. The number of dual SNP plans increased by approximately 8%, and the projected enrollment in dual SNPs increased by an estimated 12%.
Star Ratings and Quality Impact
CMS did not add any new measures for Star Ratings 2025 (Measurement Year 2023). Notably, the Plan All-Cause Readmission measure weighting has increased from 1 to 3 as expected. The Getting Appointments and Care Quickly measure is expected to remove the question, “In the last 6 months, how often did you see the person you came to see within 15 minutes of your appointment time”. There were many efforts from health plans and provider groups to address this concern. This is considered a non-substantive change and will not be moved back to a display measure.
CMS discussed upcoming Measurement Year 2025 changes that will directly impact health plans and measure considerations. CMS and NCQA are discussing the Breast Cancer Screening (BCS) measure to open the ages from 50-74 to 40-74.
Statin Therapy for Cardiovascular Disease (SPC) is also being discussed to address the exclusion for members deemed intolerant to statins. They are considering opening the length of time and history of conditions related to taking statins. NCQA is not expecting significant impacts on rates if they include a history of intolerance outside of the measurement year.
In the Timely Decisions about Appeals and Reviewing Appeals Decisions (Part C) measure, CMS is reviewing the allowable timelines the Independent Review Entity (IRE) allows for appeals files submitted electronically. This would not affect submissions received by mail but would reduce the timing from 35 calendar days and would consider the IREs normal business hours and submission date stamp.
CMS is further discussing changes to cross-cutting measures including identifying chronic conditions through claims versus clinical data. We recommend working with your measure vendor to ensure these changes are in consideration for development.
Advantmed Analysis
Based on the Advance Notice, we do not see any significant impact to Advantmed’s products and services. Advantmed will update the blend percentages and the model changes, if any, within 30-60 days of the CMS Final Announcement.
Medicare Advantage plans that can accommodate the changes in the risk adjustment model and payment years while managing increasing medical costs are likely to succeed in the growing MA market. To offset the slightly negative average benchmark payment, we can expect an increase in both prospective and retrospective activities, as well as more vigilance and risk mitigation for RADV and potential OIG audits. CMS is also prioritizing attention to Social Determinants of Health (SDOH) and access to care, and the continued importance of Star measures.
To learn about Advantmed’s risk adjustment solutions, click here.