The Centers for Medicare & Medicaid Services (CMS) on Monday released Part 1 of its 2022 Advance Notice, which outlines changes to Part C CMS-Hierarchical Condition Categories (HCC) risk adjustment model and the use of encounter data for 2022. CMS intends to finalize the payment policies by April 5, 2021.

CMS said in a fact sheet that it issued Part 1 of the 2022 Advance Notice earlier than usual so Medicare Advantage (MA) organizations and Part D sponsors have more time to factor in the changes as they prepare their bids for 2022.

What you need to know

Here are the key changes outlined in the proposal:

CMS intends to fully phase in the CMS-HCC model in 2022: This is a change from the mix for 2021 of 75 percent of the risk score calculated using the 2020 CMS-HCC model and 25 percent of the risk score calculated using the 2017 CMS-HCC model. Under the proposal for 2022, CMS will calculate 100 percent of the risk score using the 2020 CMS-HCC model.

The agency will rely entirely on encounter data for MA diagnoses: CMS said that in 2022 it will no longer use a mix of encounter and its Risk Adjustment Processing System (RAPS) data to determine risk scores. The proposed full phase-in of the 2020 CMS-HCC model is designed to calculate risk scores using diagnosis from encounter data submissions. Therefore, the Part C risk score used for payment in 2022 will rely entirely on encounter data submissions as the source of MA diagnoses.

In addition, CMS proposes to discontinue the policy of supplementing diagnoses from encounter data with diagnoses from inpatient records submitted to RAPS for calculating beneficiary risk score. CMS said it has received mixed feedback to prior year proposals to supplement encounter data-based risk scores with diagnosis from RAPS inpatient records. Some stakeholders have said that maintaining two systems is a burden with little added value. The agency also said in the Advance Notice that it has provided ample support to MA organizations during the transition from RAPS to encounter data-based risk scores and it will no longer be necessary in 2022.

Encounter data concerns

Health plans have expressed concerns with gathering and validating encounter data. Reports produced by MedPAC, the Government Accountability Office and the Office of Inspector General have noted that incompleteness and inaccuracy in the encounter data may result in underreporting of claims from important sites of care. Other concerns: inconsistent reporting, lack of information within the data about supplemental benefits, and limited ability to track specific providers.

To submit comments or questions about the proposal, go to, enter the docket number “CMS-2020-0093” in the “Search” field, and follow the instructions for “submitting a comment.” Comments must be received by 6 p.m. EST on Friday, November 13.