Tag Archives: risk scores

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. 

Survey analyzes differences between Medicare Advantage RAPS and EDS risk scores

As the Centers for Medicare and Medicaid Services (CMS) continues to phase out the Risk Adjustment Payment System (RAPS) as a source for risk adjustment diagnoses, it is important that Medicare Advantage organizations (MAOs) understand the expected impact of the Encounter Data Processing System (EDS) as the single source of diagnoses for calculating risk scores and the impact this transition may have on revenue.

Milliman professionals have periodically conducted surveys that identified the average difference between RAPS-based and EDS-based risk scores. The most recent survey results show that EDS scores have now caught up to or exceeded RAPS scores in many cases, whereas surveys from prior years showed that EDS were generally lower than RAPS scores.

Milliman actuaries David Koenig, Emily Vandermause, and Rebecca Gergen discuss the results in their paper entitled “Have we reached parity between Medicare Advantage RAPS and EDS risk scores?

How may social distancing affect Medicare Advantage organizations?

The COVID-19 pandemic has brought unprecedented stress and challenges to the healthcare industry. Based on the nature of the Medicare Advantage program and the predominantly elderly population it serves, Medicare Advantage organizations (MAOs) in particular face unique challenges. Beginning in early 2020, parts of the country implemented social distancing, with periods of closures or reduced capacity for many healthcare professional offices and postponement of nonurgent procedures at hospitals. Due to greater susceptibility, seniors may continue social distancing for more time and may be more hesitant to continue with normal social interactions, including receiving routine healthcare services.

In this article, Milliman’s David Koenig, Rob Pipich, and Michael Polakowski explain why MAOs need to be aware of the possible implications of these realities on their business and why they should address any issues now.

How will changes to Medicare Part D risk score model affect health plans?

In April, the Centers for Medicare and Medicaid Services (CMS) released details for the 2020 Medicare Part D pharmacy hierarchical condition categories (RxHCC) risk score model. The model change will affect health plans differently based on demographics and other factors. Overall the model change increased low-income risk scores and decreased non-low-income risk scores.

In this paper, Milliman’s Adrian Clark and David Koenig summarize the changes in member risk scores resulting from the risk score model update. They also quantify the model change using three separate metrics: the change to the model coefficients, the overall change in risk score for a nationwide population by key enrollee characteristics, and the change to the normalization factor.

Opioid prescription patterns affect risk scores

Opioid prescribing nationwide peaked in 2012 at over 80 prescriptions per 100 persons. Between 2012 and 2016, the prescribing rate decreased by almost 20%. Even after this decline, 19% of the U.S. population filled at least one opioid prescription during 2016.

As opioid prescribing declined, many doctors switched to other pain relief drugs. The change in prescribing patterns has potential implications for risk adjustment, because some of the drugs now being used for pain relief were previously flagged in pharmacy-based risk adjustment models as associated with high-cost conditions such as multiple sclerosis.

This brief by Christine Mytelka, Melanie Kuester, Colin Gray, and Lucas Everheart provides data on the decline in opioid prescribing and the increased use of other non-opioid pain relief drugs. Additionally, it addresses the corresponding effect that changing prescribing patterns may have on evaluating population health and risk-adjusted payments in risk-based managed care programs.

Medicare Advantage risk score considerations

Risk scores are a crucial area of focus for successful Medicare Advantage (MA) plans because changes in risk scores directly affect plan revenue. However, risk scores are complex and are influenced by many factors, which can confuse those who are new to MA risk score development. This article by Milliman’s Hillary Millican and Brad Piper offers perspective on the following questions related to MA risk scores.

• What time period of diagnoses supports risk scores?
• When are revenue payments made?
• Who submits diagnoses used to create risk scores?
• Why is member retention critical for the success of a Medicare Advantage organization (MAO)?