Analysis of CY 2018 Advance Notice of Payment and NPA Comments
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1 Analysis of CY 2018 Advance Notice of Payment and NPA Comments Charles Fontenot Senior Director of Health Plan Management and Reimbursement Policy National PACE Association
2 Session Objectives PACE Risk Adjustment Methodology (slides 3-9) Analysis of CY 2018 Advance Notice of Payment (slides 10-12) 2
3 CMS-HCC Risk Adjustment Models CMS-HCC v21 for Parts A and B (aka Part C) non-esrd beneficiaries and functioning graft patients CMS-HCC ESRD for Part C dialysis and transplant patients Rx-HCC for Part D 3
4 Medicare Risk Adjustment Components County Benchmark Payment Rate Participant s HCC Risk Score Normalization Factor MA Coding Intensity Adjustment Frailty Adjuster Note: Frailty Adjustor not applied to LTI or ESRD 4
5 Frailty Adjustment Accounts for variations in PACE participants Medicare costs not explained by the CMS-HCC model Organizational-level frailty adjuster added to HCC risk score for community-based and new enrollees Frailty adjuster based on functional impairments reported by each PACE organization s enrollees on Health Outcomes Survey-Modified (HOS-M) 5
6 Part C Risk Score and Payment Calculation Raw Risk Score = Demographic Relative Factors + Disease Relative Factors Normalized Risk Score = Raw Risk Score/Normalization Factor Adjusted Risk Score (for MA Coding Intensity) = Normalized Risk Score * (1 MA Coding Intensity Factor) Adjusted Risk Score with Frailty = Adjusted Risk Score + Frailty Factor Risk Adjusted Payment = Monthly Capitation Rate * Adjusted Risk Score with Frailty 6
7 County Payment Rates CY2017 County payment rates are the greater of: prior year s rates trended forward (using MA Growth rate) average per capita fee-for-service payment amounts Payment rates vary significantly across counties, e.g., in 2017 (rounded): New Orleans, LA (St. Bernard county) $1540 Miami, FL (Dade county): $1463 Oakland, CA (Alameda county): $1063 Pittsburgh, PA (Allegheny county): $ 950 Portland, OR (Multnomah county): $ 898 Big Stone Gap, VA (Dickenson county): $ 780 7
8 Sample CMS-HCC Risk Score Calculation Community Resident 82 year-old woman:.517 Medicaid eligible:.213 CHF (HCC85):.361 COPD (HCC111):.388 Dementia (HCC 51):.616 CHF_COPD (INT4):.255 Unadjusted Risk Score = 2.35 Normalization Factor: Normalized Risk Score = (2.35/1.051) = MA Coding Intensity Adjustment: 5.66% Adjusted Risk Score = * ( ) =
9 Example of Payment Calculation Community Resident HCC Adjusted Risk Score* = Frailty Adjuster =.105 County Payment Rate = $ Payment = ( ) * $ = $ * After normalization and coding intensity adjustment 9
10 Comparison CY2017 to 2018 ANP Payment Factor Advance Notice Section Reference Medicare Advantage (MA) growth factor Section A. Medicare Advantage (MA) Coding Adjustor Section H. Calendar Year % Advance Notice Proposed for CY % 5.66% 5.91% Description and Impact PACE county benchmark rates are calculated to be the greater of (1) the average per capita fee for service (FFS) cost or (2) the prior year s rate updated by the MA growth factor. For most PACE organizations, the county rate will be the prior year s rate updated by the MA growth factor. A positive growth factor increases PACE organizations county benchmarks. The MA coding adjustor is designed to account for differences in diagnostic coding between MA and Medicare fee-for-service. A PACE organization s HCC score is multiplied by (1-MA coding adjustor). An increase in this adjustor therefore results in a lower HCC score. Normalization Factor Section I The normalization factor adjusts for changes in coding over time. The HCC score is divided by the normalization factor, therefore the higher the factor the lower the HCC score. The increase in the normalization factor will result in a lower HCC score. HCC Model No Section HCC Model v. 21 No change from prior year With no proposed change in the HCC risk adjustment model, PACE organizations with the same diagnostic and other risk factor profile would see no change in their HCC scores. Frailty Factors No Section No change from prior year No change from prior year With no change in the frailty factors, PACE organizations with the same level of ADL dependencies will see no change in their frailty scores.
11 Trends in Payment Adjustments MA Growth Coding Intensity Normalization Frailty Factor
12 NPA ANP Comments to CMS CMS-HCC Risk Adjustment Model NPA supports CMS decision to retain the current PACE CMS-HCC Risk Adjustment Model (CMS-HCC Model v. 21). Frailty Factor NPA supports CMS decision to retain the existing Frailty Factor model used to explain costs that are not explained by diagnoses in the CMS-HCC v21 model. Encounter Data as a Diagnosis Source for NPA supports CMS decision to continue the same method of calculating risk scores that CMS has been using since PY 2015.
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