RISE RAPS-EDS Collaboration Research Project

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An Industry Collaboration Study on New CMS Policy on Payment to Medicare Advantage Plans

The RISE Association announces an executive summary report published by Avalere, an Inovalon company, and technical partner in conducting the data study sponsored by the RISE Association.

Avalere analyzed data from eight Medicare Advantage Organizations (MAOs) representing 1.1 million beneficiaries in more than 30 unique plans operating across the country to understand the impact of shifting the determination of plan risk scores from the Risk Adjustment Processing System (RAPS) to the new Encounter Data System (EDS). Centers for Medicare and Medicaid Services (CMS) intends to transition gradually to EDS-based payments, starting with 10 percent of the payment based on EDS in 2016, increasing to 25 percent in 2017 and 50 percent in 2018.

CMS has said the diagnoses captured in EDS should not be different from those identified in RAPS. However, we found that this transition will significantly reduce the identification of diagnoses used to calculate the risk scores that reflect the disease burden of the plans membership. Average risk scores resulting from the EDS process were 26 percent lower in the 2015 payment year (based on 2014 claims data) and 16 percent lower in the 2016 payment year (based on 2015 claims data) compared to RAPS. The lower risk scores were primarily the result of 35-40 percent fewer Hierarchical Condition Category (HCC) diagnoses identified in EDS compared to RAPS.

The risk score differences will have significant negative implications for MAOs and the 18 million beneficiaries they serve. As an example, using an $800 bid rate, if there had been a full transition from RAPS to EDS in 2016, this would equate to an average reduction of 16.1 percent in PMPM rates, representing a decrease of $260.4 million per year for the average plan in our study. The 90/10 phase in in 2016 would result in a 1.6% reduction in PMPM rates which would translate to $25.2 million per-plan in lower payments on average.

In spite of recent actions taken by CMS to improve EDS, a new Government Accountability Office (GAO) report documents numerous problems MA plans have had in submitting data and receiving reliable edits from the agency.

A full report including extensive detailed information from the study will be released in February 2017.

For more information and full agenda details please visit: https://goo.gl/zB3SVR

CMS 2017 Final Rate Announcement (April 4, 2016), p. 61. Found at https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2017.pdf

GAO-17-223 (January 2017) found at http://www.gao.gov/assets/690/682145.pdf Accessed on January 20, 2017

About the RISE Association
The RISE Association (Resource Initiative & Society for Education) is a national association dedicated to supporting the healthplan and provider organizations involved in the healthcare reform movement, particularly those involved in the government programs markets such as Medicare Parts C & D, Affordable Care Act health insurance exchanges, special needs plans for dually-eligible individuals, Medicaid plans for needy populations, Accountable Care Organizations and MACRA initiatives.

Our vision is to build a community and an educational system that promotes successful careers for professionals who are advancing the Triple Aim of healthcare. RISE provides:

  •     A forum to build professional identity and a network of colleagues
  •     A platform to capture and share knowledge and insights
  •     A venue to develop and share benchmarks and document best practices
  •     Career track development support
  •     A channel for building alliances, partnerships and affiliations that fulfill the vision

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Kelly Grosso

Resource Initiative and Society for Education
RISE
704-341-2448
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