CMS’s Thanksgiving Offerings to MMPs and MA: Much Appreciated but Hard to Digest

By James Gutman - November 18, 2015

If there were any doubts that CMS is committed to furnishing meaningful financial relief to Medicare plans serving highly disadvantaged populations, two memos it issued within the last week should dispel them. In both cases, however, the exact way in which the agency will furnish the relief is still not certain, so the plans’ trade groups and their members will have difficulty at this stage in assessing how much help the complex contemplated changes would provide.

In the more clear-cut of the two memos, CMS on Nov. 12 said Medicare-Medicaid plans (MMPs) participating in the ongoing CMS-backed demonstration for dual eligibles will gain certain adjustments in their payment rates. Specifically, the agency said, “Medicare A/B payment rates will be adjusted to better align MMP payments with FFS [i.e., fee-for-service] costs for full benefit dual eligible beneficiaries” for calendar year 2016. But CMS goes on to say that the adjustments “will be determined on a demonstration-specific basis” based on the “proportion of revenue associated with each subgroup in the target population,” such as those below versus above age 65 and those residing in the community versus those in institutions.

In the other Nov. 12 memo, the annual request for comments on “enhancements to the star ratings” that CMS is considering for 2017 and beyond describes in abundant detail — that only an actuary could love — two alternative ways it might adjust star ratings in the “interim,” while it pursues a comprehensive review for the longer term, to reflect the socioeconomic and disability status of Medicare Advantage (MA) plan enrollees. It calls one the Categorical Adjustment Index, which would add or subtract a factor to overall and/or summary star ratings to adjust for “within-contract disparities” among subgroups in an MA plan. The other option is the Indirect Standardization method, which would calculate adjusted measure scores by comparing the actual score for a subgroup population in an MA contract with the national adjusted mean measure score for each subgroup.

Did you get all that? If not, you need to quickly since comments are due by Dec. 10, which is the same four-week comment span that CMS is allowing on its complex approach unveiled Oct. 28 to modify risk adjustments for MA plans with dual-eligible members, even though plans won’t know yet the key “coefficients” that CMS will use in this contemplated change. And you can’t fault CMS on those deadlines because it needs time to study the comments before it must issue the required advance 2017 MA payment rates and Call Letter in mid-February. Moreover, all these modifications should benefit plans serving disadvantaged populations.

CMS clearly realizes the complexity it and the plans must take on regarding these proposals, and that’s probably one reason there are no new stars measures being considered for 2017 as of now, according to the Nov. 12 memo for MA sponsors. In addition, both MMPs and MA plans clearly appreciate that CMS is doing all of this, based on the initial comments they and their trade groups have given me. But is there any feasible alternative to all this complexity and uncertainty, especially since MA plans now are in the midst of both their 2016 Annual Election Period and deciding what products to offer for 2017? Is the only way to create true equity for MA plans and MMPs serving severely disadvantaged populations by creating the equivalent of the Actuaries' Full Employment Act of Fall 2015?

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