The CMS on Monday proposed changes to Medicare Advantage payments for 2021, including an increase in the percentage of patient "encounter data" used to calculate payments.
The agency said it plans to continue phasing in the use of diagnoses from encounter data to determine patient risk scores, which are used to adjust insurer payments from the federal government, despite complaints from the insurance industry that the data is often inaccurate and incomplete. Encounter data is detailed information about the patient based on visits with clinicians.
The CMS has used encounter data to calculate payments since 2016, but wants to use more of it. For 2021, it proposed using a blend of 75% encounter data and 25% of data from the less-detailed Risk Adjustment Processing System, or RAPS—which historically was used to calculate risk scores. In 2020, the CMS is using a mix of 50% encounter data and 50% RAPS.
The proposed change is included in the first of two parts of the 2021 Medicare Advantage advance notice. The advance notice for Medicare Advantage capitation rates will be published no later than Feb. 6 and finalized no later than April 6. The CMS said comments are due to the agency by March 6.
Federal payments to Medicare Advantage plans are adjusted to reflect patients' health and other factors. Patients receive risk scores based in part on medical coding. The sicker the patient, the higher the risk score and the higher the payment an Advantage plan receives from the federal government. Healthier patients receive lower risk scores which translates to lower insurer payments.
