News: Medicare Advantage plans to get a 1.66% payment increase in 2021
CMS has published the Calendar Year (CY) 2021 Rate Announcement, which finalizes the Medicare Advantage (MA) and Part D payment methodologies for CY 2021. CMS says that the announcement addresses comments received on Parts I and II of the CY 20201 Advance Notice.
In light of recent world health events, CMS says that the announcement “does not catalog CMS’ actions related to the 2019 Coronavirus Disease (COVID-19) outbreak,” but that they are “working around the clock to ensure that Americans can sleep soundly, knowing that their government is prepared and equipped to address any possible spread of the disease.”
In a CMS fact sheet, the agency says that the rate adjustments are an example of how they are focused on implementing the policies that matter most for “ensuring continuous and predictable payments across the healthcare system and ensure care can be provided where it is needed.”
The fact sheet provides a chart to indicate the expected year-over-year percentage change in payment:
|
Impact |
2021 Advance Notice |
2021 Rate Announcement |
|
Effective Growth Rate |
2.99% |
4.07% |
|
Rebasing/Re-pricing |
N/A |
-0.35% |
|
Change in Star Ratings |
0.23% |
0.23% |
|
MA Coding Pattern Adjustment |
0% |
0% |
|
Risk Model Revision |
0.25% |
0.25% |
|
Encounter Data Transition |
0% |
0% |
|
Normalization |
-2.54% |
-2.54% |
|
Expected Average Change in Revenue |
0.93% |
1.66% |
For 2021, CMS expects the underlying coding trend to increase risk scores on average by 3.56%.
The agency says they are finalizing the continued phase-in of the 2020 CMS-Hierarchical condition category (HCC) model, with full implementation being reached by 2022. CMS is finalizing the proposal to calculate risk scores for CY 2021 payments to MA organizations as the sum of:
- 75% of the risk score calculated with the 2020 CMS-HCC model, and
- 25% of the risk score calculate with the 2017 CMS-HCC model
This is a change from the blend for CY 2020, which was a sum of the 50% risk score calculated with the 2020 model and 50% calculated with the 2017 model.
For CY 2021, CMS is finalizing the proposal to calculate risk scores as the sum of 75% of the encounter data-based risk score and 25% of the Risk Adjustment Processing System (RAPS)-based risk score. They are finalizing the proposal to calculate the encounter data-based risk scores with the 2020 CMS-HCC models and the RAPS-based risk scores with the 2017 CMS-HCC model.
Editor’s note: Click here for the full CY 2021 Rate Announcement. Click here for the CMS fact sheet.