Wednesday, March 13, 2013

2014 Advance Notice Released

On Friday, 2/15/2013, CMS issued the combined 45 day Advance Notice and Call letter,  which describes proposed changes related to the CY 2014 Medicare Advantage (MA) and Part D payment methodos.  Some important Medicare Advantage proposals in the notice include:


·         Growth Rates The transition to the payment methodology enacted in the ACA will cause the pre-ACA payment methodology to be phased-out over several years through MA county rates.
·         Coding Intensity Adjustment  In 2010, CMS began applying a coding intensity adjustment to the Part C risk scores to account for the difference in coding patterns between MA and  FFS Medicare.  In the Advance Notice,  CMS is proposing an MA coding pattern difference adjustment of 4.91% for payment year 2014, which is the minimum coding intensity adjustment required under the ACA as amended by the American Taxpayer Relief Act of 2012.  The coding intensity adjustment applied in 2013 was 3.41%

·         Clinical Update and Recalibration of the CMS HCC Risk Adjustment Model – CMS has proposesd an updated CMS HCC Risk Adjustment model for 2014 tas a result of a clinical review of diagnoses included in each HCC. 

The changes are intended to address higher rates of coding of some HCCs by MAOs compareed to FFS providers.  If implemented, the number of HCCs will increase from 70 to 79  and CMS plans to recalibrate the model. 

This will cause a reduction in the value of a number of HCCs.  CMS is proposing a phased-in implementation of the new model over a multi-year period.  For 2014, CMS would implement coefficients of the revised model but would transition over a multi-year period to the revised model denominator.

·         Fee-for-Service Normalization Factor –   The estimated FFS Normalization Factor for 2014 will be 1.026.  It was 1.028 in 2013.

·        Medicare Advantage Health Risk Assessments – CMS notes that Health Risk Assessments (HRAs) are being done to assess the health of MA members, but feels that they are also used to  identify diagnoses for submission to CMS for risk adjustment purposes.  CMS is concerned that in some cases, diagnoses are reported without follow-up care or treatment being provided to MA members.  CMS intends to implement a data collection that will require that MA organizations flag those diagnoses collected as part of an HRA, beginning with 2013 dates of service.   CMS will also be considering ways to ensure the accuracy and completeness of this risk assessment information.  Beginning in 2015, CMS may exclude a  diagnosis from risk adjustment payment  any HRA diagnoses that are not confirmed by a subsequent clinical encounter by an approved provider type (e.g., the member's PCP) for risk adjustment. 

Final provisions will be released on April 1, 2013, and we will post them as soon as possible.  You can review the Advance Notice and Proposed Model Diagnoses on