Articles
Take-Aways from the Medicare Part C and the Star Ratings 2023 Advanced Notice of Changes
published 2022-03-02
On February 2, 2022, CMS published the 2023 Medicare Advantage and Part D Advance Notice Fact Sheet, which contains some interesting data and proposed changes affecting risk adjustment in Medicare Advantage (Part C) and Medicare Part D, with significant changes in the following areas:
- Part C risk adjustment calculations
- Revisions to the 2023 ESRD Risk Adjustment model for payment to MA plans and the Program of All-Inclusive Care for the Elderly (PACE) Risk Adjustment program.
- Changes to the Medicare Advantage normalization factor for calendar year 2023.
- Implementing an updated version of the RxHCC risk adjustment model which will update the RxHCCs based on ICD-10-CM instead of ICD-9-CM, which was used in previous models.
- A change in the policies that affect Puerto Rican claims, which allow certain counties to qualify for an increased quality bonus based on the number of beneficiaries with zero claims.
- Changes that will affect Part C and D Star Ratings
After a review of the CMS announcements regarding these changes, it was noted that for Medicare Part C, CMS plans to continue using the 2022 policy to calculate 100% of the beneficiary risk score based on the 2020 CMS-HCC risk model and plan, as well as continue calculating risk scores from Medicare Advantage encounter data submissions and fee-for-service (FFS) claims exclusively.
Many of you have noticed the expanding ICD-10-CM codes surrounding social determinants of health (SDoH) and the continued talk focused on health equity, but we have yet to see any of the SDoH codes accepted as risk adjusted codes. With such an emphasis on health equity, and encouraging providers to include more in their patient questionnaires and medical record documentation about the patient's potential SDoH issues, why has CMS not considered these codes for risk adjustment? In this Advanced Notice Fact Sheet, CMS actually states they have decided to address the impact of SDoH on the beneficiary’s health status, which may result in a future where SDoH codes are actually risk adjusted. In October of 2021, we saw an update to the ICD-10-CM SDoH codes, as they were expanded to include 11 new codes, most of which describe insecurity related to housing and food, as follows:
| New (2022) ICD-10-CM Social Determinants of Health (SDoH) Codes | |
| Code | Description |
| Z55.5 | Less than a high school diploma |
| Z58.6 | Inadequate drinking-water supply |
| Z59.00 | Homelessness unspecified |
| Z59.01 | Sheltered homelessness |
| Z59.02 | Unsheltered homelessness |
| Z59.41 | Food insecurity |
| Z59.48 | Other specified lack of adequate food |
| Z59.811 | Housing instability, housed, with risk of homelessness |
| Z59.812 | Housing instability, housed, homelessness in past 12 months |
| Z59.819 | Housing instability, housed unspecified |
| Z59.89 | Other problems related to housing and economic circumstances |
And finally, COVID-19 strikes again, as CMS announces they will be changing the method used to calculate the normalization factor for 2023 by excluding FFS data from 2021 in the calculations process. Instead of using the customary 5 years of previous FFS data (which would be claim years 2017-2021), CMS will continue using the data from FFS claim years 2016-2020 to determine the normalization factor for 2023. This is proposed because of the extensive abnormalities associated with the COVID-19 pandemic during the 2021 calendar year.
For additional details on the CMS proposed changes affecting risk adjustment in 2023 review the fact sheet located in the References.
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