Risk Adjustment

4 Things You Should Know About The 2020 CMS Model

Written By
Meleah Bridgeford
Director of Risk Adjustment, Payer Solutions

In April, when CMS released the 2020 Medicare Advantage Rate Notice and Final Call Letter and confirmed the Alternative Payment Condition Count (APCC) model for 2020 CY, some changes were included in their original proposals, while others came as a surprise to health plans.

As you look to evaluate your technology, analytics, processes, and solutions, here are 4 things you should know.


1. New HCCs, But Don’t Expect a Major Increase in Revenue


The new APCC model includes 3 additional HCCs:

  • HCC51 Dementia with Complications
  • HCC52 Dementia
  • HCC159 Pressure Ulcer of Skin with Partial Thickness Skin Loss

These three HCCs are included because they’re predictive of cost and although the new model will result in a small increase in MA payment rates, you shouldn’t expect a major lift in revenue.

CMS has included two additional levers: coding intensity, which has remained unchanged, and the normalization factor, which is fairly high and will result in a decrease in risk scores. In fact, our analysis shows a 7% decrease between the two models.

The new model includes an additional coefficient for HCC counts between 4 and 10, which can result in a small increase in revenue, but it won’t be enough to offset the change in normalization. Since the expected increase in the HCC capture rate is guaranteed to only account for an “average” plan population, and only a portion of the decrease, we estimate average reimbursements will fall by as much as 3 percent more than CMS has accounted for if the new HCCs are not captured.

Of course, this will also impact providers so it will be more important than ever for them to make sure they know how to discover opportunities. Providers will need to ensure their documentation and coding are optimal, and they have high re-capture rates every year.


2. EDS Will Make Up 50% of Reimbursement


As expected, EDS data will now make up 50 percent of RAF, up from 25 percent in 2019. In 2021, EDS data will make up 75 percent and 100 percent by 2022.

Health plans must make sure they are analyzing and correcting differences between RAPS inpatient data and EDS inpatient data, identifying errors and the source of the errors, as well as issues with claims, providers, and members, and managing them appropriately.


3. Special Supplemental Benefits for the Chronically Ill (SSBCI)


For the first time, CMS has included Special Supplemental Benefits for the Chronically Ill to include non-medical, in-home services for chronically ill beneficiaries. The benefits will include things like meals, grocery shopping, and transportation.

This is an important addition because studies show that by keeping the chronically ill and aging populations in their homes and providing support services, they’re less likely to end up in the ER due to unmanaged health conditions or falls and injuries. For example, Humana has seen a 44% decrease in hospital readmissions with their in-home benefits.

As more health plans look to implement these supplemental benefits, we expect it to provide a significant source of competition.


4. Telehealth for All MA Beneficiaries


Unlike previous years when telehealth benefits were available only to members in rural communities, 2020 will usher in a new era where the benefit will be available for all Medicare Advantage beneficiaries. This will definitely be a win-win for providers, payers and beneficiaries alike and a game changer in how health plans manage their members.

Health plans will need the appropriate infrastructure to implement telehealth of course, but many health plans have already been aggressive in offering this benefit, and we expect many will continue to do so in CY 2020.


Navigating the new APCC model requires a well-designed risk adjustment strategy specific to your member population. Through our epiAnalyst and epiEncounter solutions, we’ve created a RAF playbook to help you identify HCC opportunities, streamline and reconcile RAPS and EDS data, and make accurate financial projections. To learn more, contact us today.




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