Viewpoint: Part 1 of the 2019 CMS Advance Notice

Health Care Conversation

By: Rich Gamret, FSA, MAAA, Director, Actuarial Consulting, Optum

CMS recently released Part 1 of the 2019 Advance Notice of Methodological changes for Medicare Advantage. This was a first for the industry — this information has historically been released in February.

As required by the 21st Century Cures Act, CMS is focused on improving the predictability of the risk adjustment (RA) model’s claim cost. The question for many health plans now is: How much will the proposed 2019 RA model changes actually change Medicare Advantage payments in 2019?

The precise impact of these changes will vary by plan and population. Our thoughts on the proposed changes include:

  1. New counting component.CMS is proposing to implement coefficients to reflect the comorbidity of members who are diagnosed with multiple payment Hierarchical Condition Categories (HCCs). Under the proposed model, additional risk factors will be added to reflect the count of payment HCCs with…

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