Centene Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

WASHINGTON, July 15 -- Patti Barnett, vice president for health policy at Centene Corp., St. Louis, Missouri, has issued a public comment on the Centers for Medicare and Medicaid Services' proposed rule entitled "Amendments to the Health and Human Services-operated Risk Adjustment Data Validation under the Patient Protection and Affordable Care Act's Health and Human Services-operated Risk Adjustment Program". The comment was written on July 1, 2020, and posted on July 13, 2020:

* * *

Centene appreciates the opportunity to submit comments on the proposed rule, "Amendments to the HHS-Operated Risk Adjustment Data Validation Under the Patient Protection and Affordable Care Act's HHS-Operated Risk Adjustment Program," (Proposed Rule) which was published in the Federal Register on June 2, 2020 by the Department of Health and Human Services (HHS).

Centene Corporation (Centene), a Fortune 100 company, is a leading multi-national healthcare enterprise that is committed to helping people live healthier lives. The company takes a local approach - with local brands and local teams - to provide fully integrated, high-quality, and cost-effective services to government-sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. Centene offers affordable and high-quality products to nearly 1 in 15 Americans across all 50 U.S. states, including Medicaid and Medicare members (including Medicare Prescription Drug Plans) as well as individuals and families served by the Health Insurance Marketplace, the TRICARE program, and individuals in correctional facilities.

The company also serves several international markets, and contracts with other healthcare and commercial organizations to provide a variety of specialty services focused on treating the whole person. Centene focuses on long-term growth and the development of its people, systems, and capabilities so that it can better serve its members, providers, local communities, and government partners.

Centene appreciates this opportunity to offer comments on the proposed amendments to the Risk Adjustment Data Validation (RADV) Program provided in the Proposed Rule. After extensive review and discussion, Centene respectfully offers the following comments on the proposed amendments.

Error Rate Calculation Methodology

HCC Grouping for Failure Rate Calculation

HHS proposes to modify the creation of RADV HCC failure rate groupings and place all HCCs that share an HCC coefficient estimation group in the adult risk adjustment models into the same HCC failure rate grouping before determining failure rate of HCCs and HCC groups. These HCC failure rate groupings would be known as "Super HCCs." HHS will not apply a priori stability or hierarchy violation constraints, but seeks comments on whether its application is necessary.

Centene supports HHS' proposed creation of the Super HCCs. We believe this will streamline HCC groupings and reduce misaligned groupings that may potentially be harming others. However, we request that HHS provides criteria in the final rule for how the Super HCCs will be combined and created.

"Payment Cliff" Effect

HHS proposes to calculate and apply a sliding scale adjustment between the 90 and 99.7 percent confidence interval bounds (from +/- 1.645 to 3 standard deviations) to mitigate the impact of the "payment cliff" effect.

Centene appreciates HHS' attempt to potentially mitigate the payment cliff for situations where issuers may be close to the confidence intervals and are not substantially different than those issuers inside the confidence intervals. However, we discourage HHS from applying such a steep sliding scale adjustment because although it may reduce the cliff edge, it will increase the number of outliers and cause prediction uncertainty rather than transparency for issuers. Thus, we recommend that HHS explores alternative approaches such as a modified version of the sliding scale approach, starting at 95 to 99.75 percent, which would both maintain the same level of outliers and mitigate the payment cliff effect. Additionally, if HHS finalizes this approach, we request that prior RADV results and other relevant data is released to alleviate the predictability issue.

Negative Error Rate Issuers with Negative Failure Rates

HHS proposes to adopt an approach that constrains negative error rate outlier issuers' error rate calculations in cases when an issuer's failure rate is negative. The approach intends to do so by applying a constraint to the Group Adjustment Factor (GAF) and calculating the negative error rate outlier as the difference between the weighted mean failure rate for the HCC grouping (if positive) and zero (0), beginning with the 2019 benefit year RADV.

Centene supports HHS' proposal to modify error rate calculations to further deter issuers from improperly benefiting financially due to negative failure rates. Issuers with a negative outlier status due to a negative failure rate indicates inaccurate EDGE data submission (e.g., undercoding, coding incorrectly, etc.). Current RADV methodologies implicitly reward these inaccuracies and thereby impose unfavorable adjustments to issuers who are not outliers. We strongly encourage HHS to prevent these outlier issuers with a negative failure rate from gaining a financial advantage in order to better stabilize the RADV program.

Application of HHS-RADV Results

HHS proposes to transition from the current prospective application of RADV results to an approach that would apply the results to the benefit year being audited beginning with the 2021 benefit year. HHS proposes the following two approaches to accomplish a transition to the concurrent approach - (1) "average error rate" approach where HHS would calculate an average value for the 2021 and 2020 benefit years' RADV error rates and apply this average error rate to 2021 risk adjustment plan liability risk scores and transfers; or (2) "combined plan liability risk score" approach where HHS would apply 2020 benefit year RADV risk score adjustments to 2021 benefit year plan liability risk scores, and then apply 2021 benefit year RADV risk score adjustments to the adjusted 2021 plan liability risk scores. Alternatively, due to COVID-19, HHS seeks comment on whether to apply either of the outlined transition approaches to the 2020 benefit year RADV. The alternative timeline would require the 2020 benefit year risk adjustment plan liability risk scores and transfers to be adjusted twice - first to reflect 2019 benefit year RADV results and again based on 2020 benefit year RADV results.

Centene supports the application of the "average error rate" approach for both the 2021 benefit year and the 2020 benefit year alternative timeline due to COVID-19. We believe that the "average error rate" approach is most suitable to achieve risk mitigation and ensure that the transition will not have unintended consequences on issuers' financials, unlike the "combined plan liability risk score" option, which does not provide transparency on what will occur to negative error rate outliers in order to provide accurate and complete financial forecasting.

Furthermore, Centene supports extending the validation of RXCs for an additional pilot year on both timelines, as issuers are still adjusting to and learning how to properly conduct their programs as currently administered. After HHS reviews and assesses the results from the 2018 benefit year pilot, we encourage HHS to share how adjustments for RXCs will be made to better inform issuers on the impact of RXCs. We recommend that RXCs receive their own specific adjustments when HHS calculates the failure rates and negative error rates.

We would be happy to share our analysis with HHS and work with other stakeholders to further discuss the proposed amendments to the RADV program that allow issuers to more effectively achieve the full potential of the program as envisioned by HHS and to mitigate any negative impacts on market stability.

Thank you for the opportunity to submit comments on this proposed rule. We remain committed to the Health Insurance Marketplace and look forward to continuing our collaboration with HHS to stabilize and improve the HHS-RADV program.

If you have questions or need more information, please contact me at [email protected] or 314.349.3086.

Sincerely,

Patti Barnett

Vice President, Health Policy

* * *

The proposed rule can be viewed at: https://www.regulations.gov/document?D=CMS-2020-0059-0001

TARGETED NEWS SERVICE (founded 2004) features non-partisan 'edited journalism' news briefs and information for news organizations, public policy groups and individuals; as well as 'gathered' public policy information, including news releases, reports, speeches. For more information contact MYRON STRUCK, editor, [email protected], Springfield, Virginia; 703/304-1897; https://targetednews.com