2023 CMS Rate Announcement: 8.5% Revenue Boost, Changes Deferred to Rulemaking Process

Sara Ratner, senior vice president, government markets and strategic initiatives, Icario, breaks down CMS' recent Rate Announcement and highlights changes to Star Rating measures. 

On April 4, 2022, the Centers for Medicare & Medicaid Services (CMS) released its Announcement of Calendar Year (CY) 2023 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (the Rate Announcement). While there is a large increase in the capitated rates, many changes that were considered substantive were deferred to the future rulemaking process. CMS’s response doesn’t provide definitive policy or reforms, but it reinforces future key focus and investment areas.

As part of the Rate Announcement, CMS published the following as the payment impact from the policy changes:

Star Rating RemindersSeveral components influenced the change in the Advance Notice. First, there was an increase in the projected growth rate. In addition, the changes are predominantly due to the application of the rebasing/repricing impact, which was not available when the Advance Notice was released. The Rate Announcement also increased average Star Ratings by .54%. CMS also did not change the minimum coding pattern adjustment of 5.9%, which reflects diagnosis coding differences between Medicare Advantage and Fee-For-Service providers.

• Removal of Rheumatoid Arthritis Management  
• Updated Statin Use in Persons with Diabetes – from a weight of 3 to a weight of 1 for 2023 Star Ratings 
• Controlling Blood Pressures transitioned off the display page into 2023 Star Ratings as a new measure, with a weight of 1 for 2023 Star Ratings and a weight of 3 thereafter 

Star Rating Changes

Commentary suggests some potential changes that will be codified this year that were also addressed in the CY 2023 Medicare Advantage and Part D Proposed Rule (Proposed Rule) in January. Key areas worth mentioning:

Diabetes Care, Kidney Disease Monitoring 

This measure was retired after Measurement Year (MY) ’21. However, the Kidney Health Evaluation for Patients with Diabetes measure was on the display page for the ’22 Star Ratings, and CMS is still reevaluating whether to permanently feature as a Star Rating.

Complaints About the Health/Drug Plan 

CMS solicited feedback on including the Lead Marketing Misrepresentation subcategory 1.30 as part of the future measure specification. This subcategory targets issues around beneficiary confusion arising from marketing materials or personnel. This would be added to category 2.30, which is currently included as part of the Complaints About the Health/Drug Plan measure specification. 

In testing this previously, CMS noted there was an 11% increase in complaint volumes. Further, this change would decrease current Star assignments for 24% of Medicare Advantage prescription drug contracts (although this is partially attributed to the increase in types of complaints contained in the dataset). Since this is a substantive change, there is a proscribed timeline and structure for adoption and implementation. Most comments did not support this inclusion as it is difficult to attribute these types of complaints strictly to the health plan, low enrollment plans would be adversely impacted, and plan sponsors are not solely in control of marketing misrepresentations.  

Adherence for Diabetes, Hypertension, Cholesterol Medication

CMS has been testing the Pharmacy Quality Alliance (PQA) socioeconomic status (SES) or sociodemographic status (SDS) specifications with the following PQA recommendations:

1. Medication adherence for diabetes, hypertension, and cholesterol should be risk-adjusted for SDS characteristics to account for population differences.
2. The measures should be adjusted for age, gender, dual eligibility/low-income subsidy, and disability status.
3. Stratification should exist around these beneficiary SDS.

Similar to the specifications, comments were solicited around SDS risk adjusting for these Star Measures. While most supported, there were questions around the interaction with the Categorial Adjustment Index (CAI). CMS is still evaluating whether to align with the PQA specifications. As this would be a substantive change, this component is purely for future consideration as part of a more formal rulemaking process.

Colorectal Cancer Screening 

For MY’22, CMS is updating the measure to align with the US Preventive Services Task Force expansion of the recommended ages for this screening to include adults aged 45-75 years, up from 50-75 years. With this being a substantive change, this will reside on the display page for at least 2 years prior to rulemaking. Additionally, in MY’24, reporting will fully transition over to electronic clinical data systems.

New Proposed Changes Promoting Digital Intervention

Digital testing and interventions have become more common for clinical intervention, especially with the shift that occurred during COVID-19 and studies that have demonstrated their efficacy. Digital interventions improve prevention, diagnosis, treatment, monitoring, and management of health-related issues, and enable monitoring and managing of lifestyle habits that impact health. In addition, there has been a push to keep members and patients in their homes and, when appropriate, use that as the site of testing and care delivery. These tools can also increase the time from testing and identification to treatment.

The concerns addressed through digital interventions are particularly pronounced for diabetes and blood pressure testing. To effectively manage these, there is a regular and frequent testing cadence allowing early intervention. As a result, the following proposals help address the trend toward digital interventions:

Diabetes Care Measures

Measures are being considered that focus on eye exams and controlling blood sugar (noted above). Most noteworthy is consideration for incorporating continuous glucose monitoring data into future measures. As more patients use continuous glucose monitoring, this will allow for a dynamic representation of a patient’s blood sugar.

Controlling Blood Pressure

Similar to the continuous glucose monitoring proposal above, the National Committee for Quality Assurance (NCQA) is looking at new measures to allow a persistent measurement of blood pressure through electronic data as opposed to a point-in-time static measure.

These 2 measures indicate a greater willingness for CMS to use digital technology to measure a patient’s health status and outcomes. This is an important juncture because as more testing, monitoring, and therapies become digitally administered, there will be a need to accommodate advances to avoid duplication in data collection and an abrasive patient experience.

Care for Older Adults 

Similar to the Advance Notice, CMS noted its consideration of collecting the Care for Older Adults category ratings in a digital format in the future, pending rulemaking. Three measures make up this category, which include Medication Review (C06), Pain Assessment (C07), and Functional Status Assessment (this is on the display page for the 2023 Star Ratings). While there was support for this, some comments expressed a reticence and need to move more slowly.

This category of changes will be important to watch, especially as the final rule is released. There was a heavy focus in the Proposed Rule on the population enrolled in special needs plans (SNP), particularly around creating an enrollee advisory committee and implementing vehicles to drive greater alignment between Medicare and Medicaid. In addition, CMS also proposed having SNP screening and interventions for unmet social needs focusing on housing, transportation, and food security. There has been a dramatic increase and focus on dual eligible SNPs, with 4.1 million individuals currently enrolled out of over 13 million dual-eligible individuals, highlighting the potential growth opportunities in this market.

Adult Immunizations

CMS reiterated its comments in the Advance Notice that it is evaluating whether to update the pneumococcal measure consistent with potential NCQA updates. In addition, while there is support for replacing the CAHPS flu vaccination measure, there are outstanding questions about how to capture data otherwise missing from claims since flu vaccines may be done in a community setting without a claim. Consideration is also expressed for a COVID-19 vaccine measure. However, this is still being evaluated due to the dynamic nature of the vaccination.

Display Measures

Cardiac Rehabilitation

CMS is posting this 2023 display measure (for MY’21), which reports the percent of members aged 18 years and older who attend cardiac rehabilitation following a cardiac event. This includes those members attending:

• 2 or more rehabilitation sessions within 30 days after the event
• 12 or more sessions within 90 days after the event
• 24 or more sessions within 180 days after the event
• 36 or more sessions within 180 days after the event

Physical Functioning Activities of Daily Living 

The Physical Functioning Activities of Daily Living measure was posted to the 2021 display page. CMS received various responses to this and, as a result, is looking at adjusting this display measure for issues the health plan may not influence, such as age, education, SES, and gender.  

New Measures and Enhancements

Driving Health Equity

Social risk factors influence care delivery, utilization, and outcomes. With the increased focus and attention, CMS is looking for ways to account for these disparities and their impact in the Star Ratings. While the categorical adjustment index may accommodate certain within-contract differences, CMS is looking for new approaches to address disparities in members with a particular social risk factor and potentially incorporate incentives to reduce disparities. This is consistent with the comments in the Advance Notice that CMS will continue to review potential incentives to foster health equity.

Health Equity Index

CMS is developing a health equity index as a methodological enhancement to Star Ratings which summarizes through a single score contract performance with social risk factors in multiple measures. While data is already available for those with a disability and who receive a low-income subsidy and are dual-eligible, additional social risk factors may influence this score.

CMS is focused on understanding what other indicators should be included as part of this index. Central to this proposal is tiered scoring dependent on contract performance in a health equity measure, which would be a subset score for each of the Medicare Advantage Star Rating measures. The top third of the contract scores would receive 1 point, the middle third would receive no points, and the lowest third would have a point subtracted. For plans with a score for at least half of the health equity subset measures, CMS uses the weighted sum to produce the final health equity index score.

There was broad support for the health equity index. CMS is also looking at replacing the reward factor with the index to incentivize a greater focus on reducing disparities, although there is mixed support expressed in the comments.

With the categorical adjustment index capturing within-group differences, a health equity index would measure between-contract differences. This further incentivizes and rewards high-performing plans with the goal of reducing disparities. While rulemaking is needed for formal adoption, later this year, CMS will provide information about contract performance relative to the health equity index.

Measure of Contracts’ Assessment of Beneficiary Needs

As described in the Advance Notice, CMS is examining whether to include a performance measure for members completing a standardized social needs assessment. There are various regulations this requirement would support; however, since this is a substantive change, CMS is looking at adding it as a display measure.

Screening and Referral to Services for Social Needs

The Proposed Rule released in January contained requirements for assessing dual eligible SNP social needs. As part of this Announcement, CMS is considering developing a performance measure based on a social needs assessment screening. 

This continues to further CMS’s goal of improving health outcomes for at-risk beneficiaries. Given NCQA’s new measure for assessing food insecurity, housing, and transportation needs and referring beneficiaries to appropriate resources for those who report these barriers, CMS is also considering including NCQA’s measure in future rulemaking.

Beneficiary Access and Performance Problems

The Beneficiary Access and Performance Problems (BAPP) measure is currently on the display page to evaluate poor plan performance that culminates in CMS action. The data to measure this is derived from CMS’s Compliance Activity Module. Prior to being added to the display page, the BAPP data included CMS enforcement actions and plan sanctions. The purpose is to determine whether there are problems with members accessing programs and if the plan is complying with all requirements. A plan scores lower if there are problems with a composite made up of the severity of the problem, the frequency, and the numbers affected. Conversely, a higher score represents fewer problems.

Even with prior criticism and support, CMS requested feedback on whether to promote it as a future Star Measure and if the BAPP should include enforcement actions and plan sanctions. Most comments reflected opposition to this.

CAHPS

CMS is testing a new web-based approach to targeting and improving response rates. The protocols would include: 

• Sending a prenotification letter 
• Following that, enrollees would receive an invitation to a web survey (if an email address is on file)
• Sending a reminder notice one week after the initial invitation
• If the enrollee hasn’t completed the survey via web, another reminder via mail would be sent out
• A phone call will be attempted if the survey still has not been received 30 days after the mail survey is sent

There was overwhelming support for this change. However, in the Advance Notice, CMS requested feedback on adding sexual orientation and gender identity and received mixed results.