Members of the RISE Risk Adjustment Policy Committee share their thoughts on the Centers for Medicare & Medicaid Services’ (CMS) recently released proposed 2023 Medicare Advantage (MA) and Part D Advance Notice and its impact on MA plans.

One of the biggest headlines from the proposed 2023 Advance Notice is that MA plans could see a nearly 8 percent increase revenue next year. If finalized, MA plans may have an opportunity to use the additional revenue to offer more generous benefit packages.

RELATED: The 2023 Medicare Advantage and Part D Advance Notice is out: What you need to know about the proposed changes

However, Sean Creighton, pictured right, a member of the RISE Risk Adjustment Policy Committee, warns that MA plans must also look at the opportunity strategically to see if a large increase in benefits is warranted given the uncertainties in the political environment.

Indeed, some MA plans may be leery to invest in new benefits and service areas for fear that Congress or CMS may offset the money later, noted Michael S. Adelberg, principal, Faegre Drinker Consulting, who also is a member of the RISE Policy Committee.

This seems like great news, but if you really believe that Congress or CMS is going to reduce Medicare payment to fund other goals, you have a real strategic issue on your hands,” said Creighton, who will join Adelberg and other regulatory experts at RISE National 2022, March 7-9, in Nashville for a deep dive into the 2023 Rate Notice and 2022 regulatory trends.

Creighton said three points from the 2023 Advance Notice stood out to him:

  • The growth rate is a little higher, but not out of line, with recent CMS announcements
  • There is a definite bump from the Stars system due to COVID related policy decisions by CMS to base Star ratings on pre-COVID data when it is favorable to the plans
  • The normalization factor is lower than in prior years (see chart below)

Source: Data provided by CMS in the Advance Notices from 2019 to 2023 (the 2022 MA risk score trend was not announced and is calculated as the average of the other 4 years). The final rates and expected revenue increases for each year are based on data which is updated after the Advance Notice and vary from the numbers presented here, and the impact of rebasing is included in the final Rate Announcement.

RISE National 2022

“These three elements lead to the growth rate actually getting passed through the plans compared to prior years where other adjustments decreased plan revenue,” he said.

Furthermore, Creighton said, a large part of the projected positive revenue impact is ascribed to MA coding trend, but this varies widely by plan. It’s not a given. Plans must continue their risk adjustment policies and programs to attain this level of growth, he said.

Proposed changes to Star ratings

While many media outlets focused on CMS’ move to advance health equity through MA and Part D Star Ratings and possibly create a new quality measure to assess how plans screen for social determinants of health, Adelberg (pictured right) said it may take years before Medicare can implement those changes.

But one change that could be quickly implemented is CMS’ proposal to add the Beneficiary Access and Performance Problems (BAPP) measure back to Stars. The measure was removed in 2018 but is currently on the display page and is intended to reflect information about problematic plan performance resulting in CMS actions. The measure is currently based on CMS Compliance Activity Module data, which includes notices of non-compliance, warning letters, ad-hoc corrective action plans (CAP) and the CAP severity.

In general, however, Adelberg said 2023 appears to be another year of smaller tweaks to Star ratings. Although CMS has laid out an agenda for establishing health equity measures and the value-based care measure, it will take years to implement these novel measures.

Creighton and Adelberg will join industry expert David Meyer, another member of the RISE Risk Adjustment Committee, for a deep dive into the 2023 Rate Notice and other regulatory trends at RISE National 2022, which takes place March 7-9 at the Gaylord Opryland in Nashville. Proof of COVID-19 vaccination is required to attend. Click here for more the full agenda, speaker roster, continuing education credits, and RISE health and safety protocols.