Every year the Centers for Medicare & Medicaid Services (CMS) makes updates to the Medicare program, including changes on how it calculates risk scores for Medicare Advantage (MA) plans. This year’s changes include the addition of several new risk-generating hierarchical condition categories (HCCs) and updates to risk score coefficients. To assess the potential impact of these changes, Cotiviti data scientists recently compared the 2019 HCC risk model to the 2017 payment year model for three Medicare Advantage plans of different sizes. Lesley Brown, vice president of risk adjustment for Cotiviti, recently presented the findings of the analysis during a RISE webinar. Here are four takeaways from the analysis and what the findings mean for MA health plans.

1. The major changes for the CMS HCC 2019 Risk Adjustment Model include the addition of four new risk-generating HCCs in chronic conditions related to substance abuse and mental health, and severity of chronic kidney disease.

These changes, says Brown, author of a whitepaper that analyzes the financial impact of the 2019 model, are driven by the mandate of the 21st Century Cures Act, which aims to modify the model to improve the accuracy of risk scores.

The four new HCCs include:

  • HCC 56: Drug Abuse, Uncomplicated, Except Cannabis
  • HCC 58: Reactive and Unspecified Psychosis
  • HCC 60: Personality Disorders
  • HCC 138: Chronic Kidney Disease, Moderate (Stage 3)

Brown says the addition of mental health and substance abuse codes shouldn’t be a surprise considering the publicity over the opioid epidemic and the increase in the number of Americans who are addicted to pain killers.

2. To assess how the changes might impact the risk scores of health plans, Cotiviti compared the 2019 HCC risk model to the 2017 payment year model for three MA plans of different sizes:

  • a large national plan covering approximately 150,000 MA members
  • a large regional plan in the Northwest that covers 55,000 MA members
  • a midsize plan in the southeast with 24,000 MA members

The analysis included a calculation of the 2018 risk scores using the 2017 CMS HCC model, applying the 2018 blended risk score methodology that CMS defined for the 2018 calendar year. The team then calculated the 2019 blended risk scores using the CMS methodology for the 2019 calendar year. The analysts then estimated the revenue impact using CMS’ annual average cost of $9,368 for a member with a risk score of one.

RELATED ARTICLE: Avalere report on CMS changes to the MA Hierarchical Condition Category Risk Adjustment Model 

3. Surprisingly, the changes had a negative impact on risk scores, according to Brown. The analysis found there was a 2 percent drop across all three plans, which puts a substantial amount of risk adjustment revenue in jeopardy.

Brown says that the prevalence of the conditions now captured by these new HCC codes appeared to be significantly underreported or underdocumented across all three plans.

The findings should serve as a warning to MA plans that they potentially could have a lower risk score for PY 2019, according to Brown.

4. Key takeaway: Educate providers to help them understand risk-generating conditions for the 2019 payment year and help them improve their documentation for drug abuse, personality disorders, and psychosis.

Brown suggests conducting education on best practices for documentation, including best charting practices and training videos for continued education certification. Depending upon the provider’s electronic medical system, she says they may be able to include alerts or prompts to help providers accurately and completely document these conditions.