Tag Archives: Risk Adjustment Data Validation

How will the pandemic impact Medicare Advantage revenue and risk scores in 2021?

While there is a great deal of focus on resource availability and handling a potential influx of severe inpatient cases resulting from COVID-19 infections, the majority of the United States saw a dramatic reduction in healthcare services around March and April 2020 and measurable reductions continue with great variation across the nation. 

As with many prospective risk adjustment models, Medicare Advantage (MA) and Part D (PD) risk scores are based on medical claims, more specifically diagnoses from face-to-face visits from the year prior to the year in which the risk score drives revenue. For 2021 MA payments, 2020 diagnoses are the basis of the final risk scores. To the extent that beneficiaries delay or avoid care, there may be fewer face-to-face encounters with providers where diagnoses can be recorded and applied toward 2021 risk scores.  

While the Centers for Medicare and Medicaid Services has announced additional flexibilities in including telehealth-based diagnoses in risk score calculations, a significant reduction in overall services is likely to result in a material reduction in both MA and PD risk scores. In this article, Milliman’s Rob PipichKarin Cross, and Deana Bell discuss the results of an analysis they performed to support 2021 MA and PD bids. They present nine scenarios intended to illustrate a range of potential outcomes on 2021 MA and PD risk scores. 

A review of the ACA’s risk adjustment validation program

The U.S. Department of Health and Human Services established risk adjustment data validation (RADV) as a mechanism to protect risk adjustment integrity by assessing certain data elements supporting risk transfers. Issuers in the individual and small group insurance markets seemed to be optimistic heading into the 2017 audit following the prior years’ RADV pilots. While most achieved a 0% error rate, many still experienced unfavorable 2018 risk adjustment transfers. In this paper, Milliman’s Cameron Gleed, Jason Karcher, and Jason Petroske discuss what happened.

How does ACA risk adjustment validation work?

Since the inception of the Patient Protection and Affordable Care Act (ACA), the U.S. Department of Health and Human Services (HHS) realized a validation process would be needed to “ensure the accuracy and consistency of the data” underlying risk adjustment. In August 2019, HHS released the results of the first issuer-level ACA risk adjustment data validation (RADV) audit. Many in the market are digesting what happened and what it could mean for their businesses. Milliman’s Cameron Gleed, Jason Karcher, and Jason Petroske break down the purpose and technical details of ACA RADV in this paper.