2024 Advance Notice Would Substantially Alter Risk Adjustment Model
Summary
Proposed technical changes to the MA risk adjustment model would have major implications if finalized.On February 1, the Centers for Medicare & Medicaid Services (CMS) released the 2024 Medicare Advantage (MA) and Part D Advance Notice. The Advance Notice is an annual regulatory document that describes the agency’s proposed payment and coverage policies for MA and Part D plans for the upcoming plan year.
In the Notice, CMS is proposing to switch the diagnostic classification used for risk adjustment in the MA program to ICD-10. CMS estimates that this, combined with other risk adjustment changes, will lead to a 3.12% reduction to 2024 plan payments. The payment decrease would be driven by the removal of 2,269 unique codes from the Hierarchical Condition Category (HCC) model. Among the top conditions impacted are major depressive disorder, diabetes with chronic conditions, vascular disease, and rheumatoid arthritis and inflammatory connective tissue disease.
CMS noted that it “conducted an assessment of conditions that are coded more frequently in MA relative to FFS.” In effect, this proposal operates as a coding intensity adjustment. Stakeholders should evaluate the impact of these changes on beneficiary access and plan payment.
| 2020 HCC Label | 2020 Count of Diagnoses | Number of Diagnoses Dropped Under 2024 Advance Notice | Percent Dropped |
|---|---|---|---|
| Major Depressive, Bipolar, and Paranoid Disorders | 827 | 425 | 51% |
| Complications of Specified Implanted Device or Graft | 325 | 325 | 100% |
| Major Head Injury | 496 | 251 | 51% |
| Amputation Status, Lower Limb/Amputation Complications | 291 | 250 | 86% |
| Other Significant Endocrine and Metabolic Disorders | 229 | 178 | 78% |
| Vascular Disease | 330 | 146 | 44% |
| Spinal Cord Disorders/Injuries | 352 | 90 | 26% |
| Diabetes with Chronic Complications | 400 | 80 | 20% |
| Rheumatoid Arthritis and Inflammatory Connective Tissue Disease | 648 | 71 | 11% |
| Dialysis Status | 50 | 50 | 100% |
| Grand Total (Unique ICD-10 Codes) | 9797 | 2269 | 23% |
*Columns may not sum due to exclusion of less impacted HCCs and inclusion of codes mapped to more than one HCC.
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