Oak Street Health: Some Medicare Advantage risk adjustment changes are bad for health equity

Some of CMS' proposed Medicare Advantage risk adjustment changes will shift resources away from underserved populations, Oak Street Health says.

In an article published March 13, Ali Khan, MD, wrote that Oak Street Health agrees many of CMS' proposed changes will increase integrity in Medicare Advantage. 

Both payer and provider groups have expressed concerns about CMS' proposed changes to Medicare Advantage risk adjustments and diagnosis coding. 

CMS' proposed changes to risk adjustment, which is the system used by CMS to pay Medicare Advantage plans based on each beneficiary's health risk, include shifting MA's diagnosis coding from ICD-9 to ICD-10 in 2024, which is used by more physicians. The agency proposed this change and others in a notice issued Feb. 1. 

Dr. Khan, Oak Street's chief medical officer for value-based care strategy, wrote that Oak Street Health conducted an internal analysis on the effect of the proposed changes to diagnostic coding, which found patients who are both Medicaid and Medicare dual-eligible and Black or African American would see a $480 per member per year reduction in risk-adjusted resources, compared to White, non-dual eligible Medicare members. 

Patients who are dual-eligible would see a reduction of $240 per year compared to White non-dual eligible beneficiaries. 

"Ultimately, what this means is Medicare beneficiaries who are most at-risk, those bearing the scar tissue of the American healthcare system, who often have had their health neglected over years or decades, will face the steepest cutbacks if these proposed changes are implemented," Dr. Khan wrote. 

Oak Street Health is recommending adjustments to CMS' proposed changes to avoid harming underserved communities, including 

  • Increasing demographic coefficients for dual-eligible beneficiaries

  • Increasing disease coefficients for certain chronic conditions

  • Adding more diagnostic codes, including ones that capture diagnoses prevalent in underserved communities

Read more here. 

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