CMS admitted to underpaying dual-eligible health plans and announced plans to modify its current risk-adjustment model in order to make up for the underpayment. The Centers for Medicare and Medicaid Services (CMS) is now working on developing a new model of payment for dual-eligible health plans.
- The CMS has admitted to underpaying dual-eligible health plans after analyzing data from the 2014 plans.
- CMS officials have announced they will be changing their risk model in order to better predict costs for these plans.
- This comes in the wake of another CMS announcement: the MA quality rating system may also be changed.
The model that the CMS uses at the moment is a prospective one based on using the patient’s health status in a year to calculate and predict the costs that might occur in the following year by using risk scores. These scores go on to influence adjustments that are made to capitated payments later made for the elderly and disabled beneficiaries signed up for Medicare Advantage (MA) plans as well as other demonstration programs.
The agency has started conducting a retrospective analysis of the 2014 plan data in response to a series of complaints from health plans challenging the accuracy of the CMS’ model for predicting costs for dual-eligible plans. CMS announced the findings of the analysis and admitted to the discovery of an underpayment for full-benefit, dual-eligibility beneficiaries but has not disclosed the exact amount that the underpayment has resulted in.
Along with the admission of the underpayment, the CMS also released a series of changes it will apply to its current prospective model in order to obtain a better evaluation of the payments they will need to make to plans. Officials say that these modifications will result in more accurate payments to the respective plans.
Jeff Myers, CEO of the trade group Medicaid Health Plans of America has stated that his company is pleased of the CMS’ response to the analyzed data and to the correlation between the socioeconomic status of dual-eligible beneficiaries and the effects these statuses have on predicting the costs. Myers is hoping that this will help level the playing field for Medicaid plans serving those more vulnerable and suffering from significant medical problems.
The announcement also comes only days after CMS officials have also indicated that the agency was considering altering their MA quality ratings in order to adjust them according to the socioeconomic characteristics of the people enrolled in the plan. This may be due to the fact that plans designed primarily for low-income members and those who are dually eligible for Medicaid and Medicare have complained about unfairly being rated.
This meant that such plans received lower star ratings which prevented them from receiving bonuses and put them at risk of losing their Medicare contracts, as the CMS has the authority to stop a plan that has received less than three stars for a period of at least three straight years.
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