The Centers for Medicare & Medicaid Services late Friday announced it released Medicare Advantage (MA) and Part D payment information due to COVID-19. The Rate Announcement includes final policies on risk adjustment for 2022.

CMS released the 2022 MA and Part D rates three months earlier than usual to give Medicare health and prescription drug plans more time to project and plan for 2022 plan costs due to the uncertainty over the COVID-19 pandemic. Bids for 2022 are due on June 7, 2021.

The announcement follows the Friday morning release of the Contract Year 2022 MA and Part D Final rule that includes additional policies applicable to coverage for the 2022 plan year and will potentially lower beneficiary cost sharing on some of the most expensive prescription drugs.

CMS said in a press release that this earlier release of the Rate Announcement, along with the policies announced in the 2022 MA and Part D Final Rule, will help MA and Part D plans better plan for 2022 plan costs, in light of the uncertainty associated with the COVID-19 pandemic. The final policies described in the Rate Announcement are expected to increase per-capita plan payments by 4.08 percent on average.

The Rate Announcement also includes:

  • The date by which plans must submit requests for changes to the appeals and complaints measures data for Star Ratings
  • Lists the measures included in the Part C and D Improvement measures and the Categorical Adjustment Index for the 2022 Star Ratings
  • Lists the states and territories with Individual Assistance designations from the FEMA major disaster declarations used in the definition of an affected contract for the 2022 Star Ratings extreme and uncontrollable circumstances policy

Risk adjustment policies

The Rate Announcement also includes final policies on risk adjustment for 2022. Due to requirements in the 21st Century Cures Act, CMS said it finalized the full phase-in of the Part C CMS-Hierarchical Condition Categories (HCC) risk adjustment model that was first implemented in 2020.

RELATED: 2022 Medicare Advantage Advance Notice: CMS reveals plans to fully use encounter data for risk adjustment

The risk adjustment model includes variables that count the number of conditions a beneficiary has among those in the risk adjustment model and additional conditions for mental health, substance use disorder, and chronic kidney disease. With the full phase-in of this 21st Century Cures CMS-HCC risk adjustment model, which is designed to calculate risk scores using diagnoses from encounter data submissions, the Part C risk score used for payment in 2022 will rely entirely on diagnoses from MA encounter data and FFS claims as the sources of diagnoses.

For more information on the Rate Announcement, click here for a CMS fact sheet.