CMS 2022 Advance Notice: 4 key takeaways for MA plans
The public comment period has just closed for the calendar year (CY) 2022 Medicare Advantage (MA) and Part D Advance Notice recently released by the Centers for Medicare & Medicaid Services (CMS). MA plans can expect an average 2.82% bump in revenue in 2022, according to Part II of the notice, up from 1.66% for CY 2021. To follow are four key takeaways from Cotiviti’s analysis of the 2022 Advance Notice.
- Risk adjustment revenues will trend positively for most health plans.
- Changes in Star Ratings should motivate health plans to reach out to their providers and reinforce the benefits of video-based telehealth visits, targeted at management of chronic conditions.
- The normalization adjustment suggests that health plans will have a slightly greater at-risk population. This may occur as members have not been able to visit their providers for condition maintenance.
- With the phase-out of RAPS, plans should be ready to fully transition to EDS to minimize revenue impact.
CMS released the 2022 Advance Notice several months earlier than usual to give MA plans more time to prepare amid the COVID-19 pandemic, which has negatively impacted both risk and quality scores for payers according to PopHealthCare, Cotiviti’s risk adjustment solutions partner. The table below compares key figures between the final 2021 Rate Announcement released this past April and the 2022 Advance Notice:
| Impact | 2022 Advance Notice | 2021 Rate Announcement |
|---|---|---|
|
Effective Growth Rate |
4.55% |
4.07% |
|
Change in Star Ratings |
-0.34% |
0.23% |
|
MA Coding Pattern Adjustment |
0% |
0% |
|
Risk Model Revision |
0.25% |
0.25% |
|
Normalization |
-1.64% |
-2.54% |
|
Expected Average Change in Revenue |
2.82% |
1.66% |
CY 2022 also marks the year CMS intends to complete its transition to basing risk scores 100% on encounter data under the 2020 CMS-HCC model, ending the RAPS-to-EDS transition that began in 2015. For CY 2021, 75% of risk scores are based on EDS data while 25% are based on RAPS data.
In a statement on Parts I and II of the 2022 Advance Notice, America’s Health Insurance Plans (AHIP) president and CEO Matt Eyles struck an upbeat tone:
“Nearly 25 million Americans—almost 40% of eligible Medicare beneficiaries—choose a Medicare Advantage plan because it delivers better services, better value, and better access to care. For 2021, average monthly premiums for MA plans will decline from $23.63 in 2020 to $21. Seniors enrolled in MA plans are more satisfied than seniors with traditional Medicare, with 93% reporting they are satisfied with their MA plan compared to 80% with traditional Medicare.
That is why MA and Part D enjoy strong bipartisan support as an essential source of coverage for seniors and people with disabilities. We appreciate that CMS continues to recognize the value of this essential program, and has continued to offer additional flexibilities to allow health insurance providers to innovate to provide greater value to older Americans.”