CMS proposes payment changes to Medicare Advantage, Part D: 5 things to know

CMS issued part one of its proposed 2022 Medicare Advantage Advance Notice, which updates payment methodologies to Medicare Advantage and Part D plans.

Five things to know:

1. CMS released the first part of the proposed rule three months ahead of schedule to give insurers more time to prepare bids for 2022 in light of uncertainty brought by the COVID-19 pandemic, according to a fact sheet

2. The agency proposed changes to how it will calculate Medicare Advantage risk adjustment for 2022. CMS wants to fully phase in a model that adds variables to count conditions in the risk adjustment model. It includes additional conditions for mental health, substance use disorder and chronic kidney disease.

3. Under the proposed rule, the Medicare Advantage risk score used to calculate payment in 2022 would rely entirely on encounter data as the source of diagnoses. In the past, CMS has used a blend of encounter data and diagnoses submitted to its risk adjustment processing system.

4. CMS also plans to discontinue its policy of supplementing diagnoses from encounter data with diagnoses from inpatient records that are submitted to the risk adjustment processing system for determining risk scores.

5. CMS said both parts of the Advance Notice will be finalized in the 2022 rate announcement set to publish by April 5, 2021.

View the full rule here.

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