Health Information Management

News: CMS discussion paper highlights changes to risk adjustment program

CDI Strategies, April 7, 2016

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Federal regulators are considering changes to the Affordable Care Act’s Hierarchical Condition Categories (HCC), according to a discussion paper written and released by CMS on March 31, 2016.

The proposed changes include addressing issues related to payer size, making the model more accurate for partial year enrollees, using prescription drug use as a predictor in the model, and pooling high-cost enrollees. In the long-term, CMS wants to explore the possibility of using socioeconomic and demographic factors as predictors. The paper also discussed how the organization calculated 2014 benefit year payments and charges.
 
HCCs are a method of risk standardization-- transfers funds from individual and small-group plans with healthier, lower-cost members to those with sicker, more expensive members. HCCs contain diagnostic codes that are grouped into clinical condition categories with similar disease characteristics and costs, somewhat akin to MS-DRGs on the inpatient side.
 
The risk adjustment program transfers funds from individual and small-group plans with healthier, lower-cost members to those with sicker, more expensive members. CMS says in the paper that the methodology the program uses “worked as intended,” though some argue that the program ends up benefitting larger payers at the expense of smaller ones. The organization says they are looking in to whether the current risk adjustment methodology appropriately addresses plan differences—it currently does not account for network differences, plan efficiency, or effective disease management or care coordination, CMS says.
 
CMS is seeking comments on possible changes, which can be made via
hhshccraops@cms.hhs.gov or REGTAP at https://www.REGTAP.info, through April 22, 2016. 



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