CMS releases Medicare Advantage, Part D rate announcement: 7 things to know

CMS released its final 2023 Medicare Advantage capitation and Part C and D rate announcement April 5.

Seven things to know:

Change in payments

The federal agency announced an effective growth rate of 4.88 percent and an 8.5 percent average revenue increase for Medicare Advantage and Part D plans.

Program of All-Inclusive Care for the Elderly risk adjustment

Payments to PACE organizations will continue to use the 2017 CMS-HCC model in 2023 to calculate non-end stage renal disease risk scores.

Medicare Advantage coding pattern adjustment

CMS is finalizing a coding pattern adjustment of 5.9 percent for 2023.

Medicare Advantage normalization factor

In 2023, CMS will calculate the normalization factor by projecting the payment year risk score using a trend that is based on five historical years of fee-for-service risk scores under the payment year model. 

Part D risk adjustment

The federal agency is proposing the use of an updated version of the RxHCC risk adjustment model for Part D sponsors other than PACE. The updated model includes a clinical update to the RxHCCs and an update to the data years using the same approach used to filter diagnoses from encounter data records for risk score calculation. 

Part C and D star ratings

CMS asked for feedback in the 2023 advance notice on plans to enhance reporting of stratified Part C and D star ratings measures by social risk factors to help Medicare Advantage and Part D sponsors identify improvement opportunities. Nearly all stakeholders supported stratified reporting, and CMS will begin sharing confidential stratified reports with contracts this spring.

Part C risk adjustment

CMS will continue two policies: calculating 100 percent of the risk score using the 2020 CMS-HCC model and calculating risk scores for Medicare Advantage enrollees using diagnoses exclusively from Medicare Advantage encounter data submissions and fee-for-service claims. 

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