MedPAC Pledges Support For CMS Risk Score Adjustment For MA Reimbursements

Main Category: Medicare / Medicaid / SCHIP
Article Date: 10 Mar 2009 - 3:00 PDT

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The Medicare Payment Advisory Commission in a letter dated March 5 stated that it supports a CMS proposal to adjust the scale used to determine the reimbursement rate for Medicare Advantage plans based on how sick a beneficiary is, CQ HealthBeat reports. The process, known as risk adjustment, allocates a risk score to the beneficiary and is intended to prevent overpayments to plans that have large numbers of healthy beneficiaries and underpayments to those with relatively high numbers of sick beneficiaries. CMS is seeking to adjust the risk scores to reflect a difference between coding practices in MA plans and traditional fee-for-service plans.

In the letter, MedPAC said, "When payment systems change and the amount providers or plans will be paid is affected by changes in their behavior to emphasize more coding and documentation, adjustments to the payment system are necessary to maintain the integrity and accuracy of the payment system." The letter also noted that the CMS proposal complies with the law. The letter added, "The differences in coding practices between MA and [fee-for-service plans] that CMS has identified result in payments beyond the 14% by which MA payments currently exceed FFS [plans]." The letter also noted that CMS found that even after controlling for patient characteristics, risk scores were persistently higher for beneficiaries in MA." MedPAC officials said that the coding changes would not lower payment differential between MA plans and fee-for-service plans below the current 14%.

Robert Zirkelbach, a spokesperson for America's Health Insurance Plans, said that MA plans should not be penalized for being more efficient than traditional Medicare in identifying patients with chronic illnesses (Reichard, CQ HealthBeat, 3/6).

MA Plan Beneficiaries 'On Notice,' WSJ Says
In related news, the Wall Street Journal on Saturday examined how MA plan beneficiaries "are on notice" because "[i]f President Barack Obama has his way, over the next decade these plans could become less common and benefits could be trimmed." Obama's recent budget proposal also includes a provision that would establish a "competitive bidding" process for MA plans to generate an estimated $175 billion in savings over 10 years to help in the costs of overhauling the health care system, the Journal reports. In addition, CMS last month proposed a 0.5% payment increase to MA plans for 2010, down from a typical 4% increase in recent years, according to the Journal.

Mark Miller, executive director of MedPAC, said that if Obama's and CMS' proposals become a reality, one "should assume ... there will be fewer managed care plans and the generous benefit packages that they have right now will be less generous." Scott Serota, president and CEO of BlueCross BlueShield Association, said, "Competitive bidding may sound appealing on the surface, but we need to examine the impact on beneficiaries, such as how many are likely to lose Medicare Advantage coverage or see significant premium increases and/or reduced benefits" (Zhang, Wall Street Journal, 3/7).

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