Tufts Health Plan Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

WASHINGTON, July 16 -- Tracey Carter, senior vice president and chief actuary at Tufts Health Plan, Watertown, Massachusetts, 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 2, 2020, and posted on July 13, 2020:

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On behalf of Tufts Health Plan, we appreciate the opportunity to provide comments on the proposed Amendments to the HHS-operated Risk Adjustment Data Validation (RADV) under the Patient Protection and Affordable Care Act's (ACA) HHS-operated Risk Adjustment Program published to the Federal Register on June 2, 2020.

A nonprofit organization founded in 1979 with over 1 million members, Tufts Health Plan is nationally recognized for its commitment to providing innovative, high-quality health care coverage. The plan offers members and employers an array of health management programs, which support evidence-based approaches to health and wellness. We are deeply committed to expanding access to high-quality, affordable health care.

Tufts Health Plan values the ongoing dialogue with the Centers for Medicare & Medicaid Services (CMS) to improve the RADV methodology and ensure that only the risk scores of plans that are true outliers are adjusted. We agree that the proposed changes represent significant progress towards reducing risk adjustment transfer payment volatility, ensuring transfer payment integrity relative to the true underlying risk in each plan's population and aligning transfer payment implementation with current financial reporting rules. Consistent with our prior comments, including those submitted in response to the HHS Risk Adjustment Data Validation (HHS-RADV) White Paper (2019 RADV White Paper),/1 we offer specific feedback on the changes proposed in this rulemaking for consideration below.

HCC Grouping for Failure Rate Calculation

Tufts Health Plan appreciates CMS' efforts to address the influence of the Hierarchical Condition Category (HCC) hierarchies and HCC coefficient estimation groups on the HCC failure rate groupings on an interim basis while continuing to assess different longer-term options. We agree that the creation of HCC failure rate groupings, or "Super HCCs," in the adult risk adjustment model should provide additional stability and represents an improvement over the current method. To the extent that creating Super HCCs for the infant model will further stabilize the results, we would support CMS extending this policy to that model.

We recommend CMS implement these changes for the 2019 benefit year RADV and see no need to further delay stabilizing measures due to the COVID-19 public health emergency.

Sliding Scale for Error Rate Calculation

Modifying outliers' risk scores based on the difference between the outliers' failure rate and the national mean, instead of the difference between the outlier and the edge of the confidence interval, has created huge cliffs in adjustments. We appreciate CMS taking steps to address the volatility created by these payment cliffs.

Under the approach proposed in this rule, CMS would calculate and apply a sliding scale adjustment between the 90% and 99.7% confidence interval bounds (from +/- 1.645 to 3 standard deviations). The determination of outliers in HHS-RADV for each HCC grouping would have a 90% confidence interval or 1.645 standard deviations. This approach would adjust the upper and lower bounds of the confidence interval to be at 1.645 standard deviations, meaning that issuers outside of the 90% confidence interval would have their risk scores adjusted, instead of beginning adjustments for issuers at the 95% confidence interval under the current methodology. CMS states that this proposed methodology will smooth results for plans close to the confidence intervals without mitigating the impact to plans whose failure rates are not close to the confidence intervals. CMS also provides data indicating that the proposed method would reduce the mean error rate for positive outliers, which would result in less impact on transfer payments. While this approach represents an improvement over the current methodology, Tufts Health Plan does not support increasing the number of plans considered outliers by starting the sliding scale at the 90% confidence interval instead of the 95% confidence interval.

Among the sliding scale adjustment options, Tufts Health Plan continues to support Option 1 as proposed in the December 2019 White Paper. This approach is simple, both the impact on the number of issuers and the total transfer dollars are low, and results in larger adjustments for bigger outliers. We recognize CCIIO's concerns with basing the results on only one year of actual RADV data.

Negative Error Rate Issuers with Negative Failure Rates

Negative failure rates introduce unpredictability in a market, since issuers who have done their best to submit accurate data and achieved 0% RADV error rates can be adversely impacted. We thank CMS for taking steps to address this and agree that constraining the negative error rate outlier when an issuer's failure rate is negative would avoid the volatility and unintended consequences introduced by negative error rates.

Tufts Health Plan generally supports CMS' proposal to constrain the error rate calculation when an issuer's failure rate is negative. The proposed constraint would be to the group adjustment factor (GAF) whereby the error rates of a negative error rate outlier issuer with a negative failure rate would be calculated as the difference between the weighted mean failure rate for the HCC grouping (if positive) and zero. Consistent with comments submitted in response to the White Paper, we continue to urge CMS to consider adjusting the negative failure rates to the national mean rather than constraining them to zero. This would eliminate any adjustment for negative error rate issuers with a negative failure rate altogether.

Application of RADV Results

Tufts Health Plan strongly supports the proposal to apply RADV results to the concurrent year. We urge CMS to adopt the transition option that averages the error rates across the two transition years over the alternative approach that would sequentially calculate and apply separate adjustments for the two transition years. Further, we recommend advancing the timing for implementing this proposal to start in 2020 based on the 2019 and 2020 benefit year RADV results. Under this revised timeline, Tufts Health Plan supports having 2020 as another pilot year for risk adjustment prescription drug categories (RXCs) to maintain consistency between the two benefit years being combined.

We continue to have significant concerns with the delayed timeline for collecting, paying and reporting the RADV transfer payment adjustments. Under this policy, adjustments for the 2020 benefit year, for example, are not paid or collected until 2024. We respectfully request CMS address this misalignment of the financial reporting rules.

We thank you for your consideration of this matter. If you have any questions, please do not hesitate to contact me directly.

Sincerely,

Tracey Carter, F.S.A., M.A.A.A.

Senior Vice President & Chief Actuary

Tufts Health Plan

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Footnote:

1/ HHS Risk Adjustment Data Validation (HHS-RADV) White Paper. Issued December 6, 2019. Available at: https://www.cms.gov/files/document/2019-hhs-risk-adjustmentdatavalidation-hhs-radv-white-paper.

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

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