The CY 2022 Rate Announcement incorporates aspects of the impact of COVID-19 on health care costs in its estimates of Medicare spending. The health, safety, and welfare of America's patients and provider workforce in the face of the COVID-19 PHE is the top priority of the
Net Payment Impact
The chart below indicates the expected impact of the updated methodologies on plan payments relative to 2021.
Year-over-Year Percentage Change in Payment
1Rebasing/re-pricing impact is dependent on finalization of the average geographic adjustment index, which was not available with the publication of the CY 2022 Advance Notice.
2The total does not include an adjustment for underlying coding trend.
2022 Part C Risk Adjustment Model
CMS will complete phasing in the CMS-HCC model first implemented for CY 2020 (i.e., the 2020 CMS-HCC model), as required by the 21st Century Cures Act. Specifically, per the 21st Century Cures Act, this risk adjustment model includes variables that count the number of conditions a beneficiary has among those in the risk adjustment model and additional conditions for mental health, substance use disorder, and chronic kidney disease. This represents a change from 2021, when CMS used a blend of 75 percent of the risk score calculated using the 2020 CMS-HCC model and 25 percent of the risk score calculated using the 2017 CMS-HCC model.
For Programs of All-Inclusive Care for the Elderly (PACE) organizations, we are finalizing our proposal to continue to use the 2017 CMS-HCC model to calculate risk scores for CY 2022.
Sources of Diagnoses for Part C Risk Adjustment
CMS calculates risk scores using diagnoses submitted by MA organizations and from Medicare fee-for-service (FFS) claims. Historically, CMS has used diagnoses submitted into CMS' Risk Adjustment Processing System (RAPS) by MA organizations for the purpose of calculating risk scores for payment. In recent years, CMS began collecting encounter data from MA organizations, which also includes diagnostic information. CMS began using diagnoses from encounter data to calculate risk scores for CY 2015 payments, and has since continued to use a blend of encounter and RAPS data-based scores through 2021, when risk scores are being calculated with 75 percent encounter data-based risk scores and 25 percent RAPS-based risk scores.
With the full phase-in of the 2020 CMS-HCC model, which is designed to calculate risk scores using diagnoses from encounter data submissions, the Part C risk score used for payment for CY 2022 will rely entirely on MA encounter data and FFS claims as the sources of diagnoses.
For CY 2022, CMS is also discontinuing the policy (used for CY 2019, CY 2020, and CY 2021) of supplementing diagnoses from encounter data with diagnoses from inpatient records submitted to RAPS for calculating beneficiary risk scores.
In addition, for CY 2022, CMS will identify diagnoses for risk score calculation from FFS claims using HCPCS-based filtering logic, which will align the filtering of FFS claims with how CMS identifies risk adjustment eligible diagnoses from encounter data and the methodology used to identify diagnoses for model calibration. We will make this update for all non-PACE risk scores that include FFS diagnoses (i.e., Part C, ESRD, and Part D).
For PACE organizations for CY 2022, CMS is finalizing the proposal to continue to calculate risk scores using the 2017 CMS-HCC model by pooling risk adjustment-eligible diagnoses from encounter data, RAPS data, and FFS claims (with no weighting).
Medicare Advantage Coding Pattern Adjustment
Each year, as required by law, CMS makes an adjustment to plan payments to reflect differences in diagnosis coding between MA organizations and FFS providers. For CY 2022, CMS is finalizing the proposal to apply a coding pattern adjustment of 5.90 percent, which is the minimum adjustment for coding intensity required by the statute.
The proportion of Medicare beneficiaries who receive benefits through MA (as opposed to FFS) is far greater in
Part C and D Star Ratings
As part of the Administration's effort to increase transparency and provide earlier opportunities for input regarding enhancements to the Part C and D Star Ratings program, CMS codified the methodology for the Part C and D Star Ratings program for the 2021 and 2022 Star Ratings in the CY 2019 and CY 2020 Medicare Part C and D Final Rules published in
The Rate Announcement includes information about the date by which plans must submit their requests for review of the appeals and complaints measures data, lists the measures included in the Part C and D Improvement measures and the Categorical Adjustment Index for the 2022 Star Ratings, and lists the states and territories with Individual Assistance designations from the nationwide
Additionally, CMS solicited feedback in the CY 2022 Advance Notice on a number of different measurement concepts including the following:
* Provider Directory Accuracy (Part C).
* COVID-19 Vaccination (Part C).
CMS will take the feedback received into consideration as we continue to explore the feasibility of developing measures in these areas.
(1) CMS issued the Health Plan Management System (HPMS) memo, "Information Related to Coronavirus Disease 2019 - COVID-19" on
Please note that the