Risk Adj in Medicare

Question 1

Factors used in developing risk scores in the CMS-HCC risk model (7)

Answer 1

HCC = hierarchical condition category

1. Demographics - age and gender factors are the starting point. Higher risk scores are assigned to beneficiaries who are eligible for both Medicaid and Medicare.
2. Disabled indicators - a separate set of age and gender factors are used for beneficiaries under age 65 who are eligible for Medicare due to disability
3. Separate models are used for beneficiaries who:
   a. Reside in a long-term care institution, or
   b. Suffer from end-stage renal disease
4. New enrollees - since no claim history exists, only age and gender factors are used. Separate factors are developed for new enrollees
5. A prospective risk adjustment methodology is used to risk-adjust future payments based on actual historical medical experience
6. Calibration - every 2 yrs, CMS re-calibrates by updating the model weights to reflect new prescription drugs and changes in medical technologies, practice patterns, and provider coding practices
7. Health status risk factors are developed from the beneficiary’s diseases (using ICD-9 codes and grouping into HCCs)

Question 2

Formulas for payment for Medicare Advantage plans (4)

Answer 2

1. Govt payment
   a. If bid =< benchmark: payment = (bidrisk adjustment )+75%(benchmark-bid)
   - note that the 75% weight is now based on star rating
   b. If bid >= benchmark: payment= (benchmark*risk adjustment factor)
   c. The risk adjustment score is determine for each member as the sum of an age/gender factor, any applicable HCC factors, and certain other factors (disease interaction factors, zeroing out HCCs that are trumped by other HCCs, and adjustments for those with Medicaid, a disability, ESRD, or in LTC)
2. Basic member premium (only if bid >= benchmark) = (bid-benchmark)
3. Supplemental member premium = MCO member premium, if any, for additional benefits or reduced cost sharing
4. Total payment to MCO = govt payment + basic member premium + supplemental member premium

Question 3

Plans available to Medicare population

Answer 3

1. Coordinated care plans - plans have CMS approved contracted provider networks. Includes HMOs, POS, PPO, Special Needs Plan (SNPs). Use fin incentives and util review. Plans must satisfy quality requirements.
2. Medicare savings account (MSA) Plans - HSA/HRA accounts offere with MA plan. MA plan makes contribution.
3. Private FFS plans - members can self-refer to any Medicare provider. Plans less expensive than Medicare supp plans.
4. Medicare cost plans - type of Medicare HMO plan similar to MA-HMO but not MA plan. Plan is based on actual plan cost and not MA plan payments. Non-netowrk services are covered by traditional Medicare FFS program.

Question 4

Types of Special Needs Plans (SNPs) (3)

Answer 4

1. Dual eligible (D-SNPs) - enrollees eligible for Medicare and MEdicaid. Contract with state Medicaid agency must include provisions that ensure coordination of benefits.
2. Instituional SNPs (I-SNPs) - enrollees are institutionalized in a facility based on CMS statements.
3. Chronic care SNPs (C-SNPs) - enrolllees have at least one server or disabiling chronic conditions. Provides benefits in addition to traditional standard Medicare FFS programs.

Question 5

Medicare Legislation related to Managed Care (3)

Answer 5

1. Tax Equity and Fiscal Responsibility Act (TEFRA)
   a. Required Medicare HMO to be paid on capitated basis (risk adjusted). Any gains used to provide additional benefits or is paid to Medicare
2. Balanced Budget Act (BBA)
   a. Major changes to payments to MA plans. Instituted operating requirements of MA plans (eligibility req)
3. Medicare Modernization Act (MMA)
   a. Implemented Part D for drugs
   b. Created MA PPO and SNPs
   c. Increased payments to plans
   d. Require bid process and risk adj payment for MA plans

Question 6

Risk Adjustment for Medicare Part D (4)

Answer 6

CMS RxHCC employs multiplicative factors.

(Beneficiary factor) x (age, sex, diagnosis).

Beneficiary categories:

1. long term institution and age
2. Long term institution and disabled
3. Medicaid dual elig
4. Low income individuals not elig for Medicaid