CMS' Medicare Advantage coding changes could hurt dual-eligible members, health plan leaders say

Nonprofit payer executives are urging CMS to pause its proposed changes to Medicare Advantage to ensure coding updates will not harm dual-eligible MA members. 

At a panel discussion hosted by the Special Needs Plans Alliance on March 27, leaders from health plans and the American Physicians Group said the proposed coding changes will have a disproportionate impact on beneficiaries in dual-eligible and other special needs plans. 

Dual-eligible beneficiaries are eligible for both Medicare and Medicaid benefits on the basis of income or other factors. Around 44 percent of dual-eligible beneficiaries are in fair or poor health, compared with 17 percent of Medicare beneficiaries without Medicaid. They are also more likely to have conditions associated with higher spending. 

In an advance notice, CMS proposed shifting MA's diagnosing coding from ICD-9 to ICD-10 and removing certain codes from the Hierarchical Condition Categories model, in addition to other changes to risk adjustment payments. 

Payers and some provider groups have opposed the changes. CMS is set to issue a final ruling on the proposal April 3. 

Angela Moczan, CFO and COO of Medicare at Pittsburgh-based UPMC Health Plan, said the payer's analysis showed CMS' proposed changes to risk payments for conditions including diabetes and heart failure would result in lower payments to special-needs plans. 

"Essentially what that will mean is the same payment for a patient diagnosed for diabetes as a patient diagnosed with diabetes with complications," Ms. Moczan said. "We've done extensive historical claims data review proving that it really does not align with the patient's actual illness severity, level of treatment and care needed." 

Ms. Moczan said she would urge CMS to pause the plan for more review, but added she thinks the possible disproportionate impact on dual-eligible beneficiaries is unintentional on the agency's part. 

Karen Schulte, president of Medicare at SCAN Group, said the proposed changes to hierarchical condition codes, and the elimination of some diagnostic codes, would underfund plans with more members with complex conditions. 

For example, Ms. Schulte said the potential  elimination of 146 vascular condition codes could hurt plans with a higher proportion of enrollees with chronic conditions. 

"In the special needs plans that SCAN offers, which are tailored to members with diabetes and heart conditions, our vascular disease prevalence rate is greater than 0.4 percent," she said. "If you eliminate the codes, the care will be more costly, which effectively punishes those plans who have the higher prevalence of these diseases for which the codes are being eliminated." 

In comments to CMS, the Special Needs Plans Alliance also called for CMS to delay implementing its proposed coding changes "until [health equity index] impact is known." Cheryl Phillips, MD, president and CEO of the organization, said CMS' proposal is not just a payment notice, but a "very complex translation and transition into risk adjustment." 

CMS' 30-day comment period was not enough time for a full assessment of the codes or for all stakeholders to weigh in, Dr. Phillips said. 

"We do not support inappropriate coding. We don't support codes that are not linked to care. But it turns out, when you're taking care of high-risk populations with a lot of chronic conditions, you end up with a lot of [hierarchical condition codes]," Dr. Phillips said. "Thus, the very populations that we are seeking to serve best are the ones that are disproportionately impacted by these changes." 

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