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Advance Notice of Methodological Changes for Calendar …

1. February 2, 2022. NOTE TO: Medicare Advantage Organizations, Prescription Drug Plan Sponsors, and Other Interested Parties SUBJECT: Advance Notice of Methodological Changes for Calendar Year (CY) 2023 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies In accordance with section 1853(b)(2) of the Social Security Act (the Act), we are notifying you of planned Changes in the Medicare Advantage (MA) capitation rate methodology and risk adjustment methodology applied under Part C of the Medicare statute for CY 2023. Also included with this Notice is a discussion of the annual adjustments for CY 2023 to the Medicare Part D benefit parameters for the defined standard benefit.

Advance Notice: The growth percentages and United States per capita cost estimates provided in Attachment I; the qualifying county determination, calculations of Fee for Service cost, direct graduate medical education carve-out, kidney acquisition cost carve-out, IME phase out, MA

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Transcription of Advance Notice of Methodological Changes for Calendar …

1 1. February 2, 2022. NOTE TO: Medicare Advantage Organizations, Prescription Drug Plan Sponsors, and Other Interested Parties SUBJECT: Advance Notice of Methodological Changes for Calendar Year (CY) 2023 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies In accordance with section 1853(b)(2) of the Social Security Act (the Act), we are notifying you of planned Changes in the Medicare Advantage (MA) capitation rate methodology and risk adjustment methodology applied under Part C of the Medicare statute for CY 2023. Also included with this Notice is a discussion of the annual adjustments for CY 2023 to the Medicare Part D benefit parameters for the defined standard benefit.

2 CMS will announce the MA. capitation rates and final payment policies for CY 2023 no later than Monday, April 4, 2022, in accordance with section 1853(b) of the Act, as established in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173) and amended by the Securing Fairness in Regulatory Timing Act of 2015 (Pub. L. 114-106). The Advance Notice of Methodological Changes is published no fewer than 60 days before the publication of the Rate Announcement and provides a minimum 30-day period for public comment. Attachment I of this document shows the preliminary estimates of the national per capita MA. growth percentage and the national Medicare fee-for-service growth percentage, which are key factors in determining the MA capitation rates.

3 Attachment II sets forth Changes in the Part C. payment methodology for CY 2023. Attachment III presents the annual adjustments to the Medicare Part D benefit parameters for the defined standard benefit, and sets forth the Changes in the Part D payment methodology for CY 2023. Attachment IV contains updates for the MA and Part D Star Ratings and solicits input on potential measure topics, measures, and Methodological enhancements for future rating years. Attachment V contains economic information for significant provisions in the Advance Notice . Attachment VI presents the preliminary risk adjustment factors. Consistent with the Executive Order On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (EO 13985), CMS is committed to advancing equity in health and healthcare for all individuals and addressing inequities that exist in our policies and programs that serve as barriers to equal opportunity.

4 As noted in EO 13985, The term equity' means the consistent and systematic fair, just, and impartial treatment of all individuals, including individuals who belong to underserved communities that have been denied such treatment.. For MA and Part D, we are exploring ways to Advance equity that include: collecting more and improved data on beneficiaries' race, ethnicity and social determinants of health;. 2. developing quality measures and Methodological enhancements that better measure, and strengthen methods of addressing, health disparities; and driving value in the Medicare program to make sure that the Medicare dollar is spent effectively and efficiently on programmatic Changes that will close health equity gaps.

5 MA organizations and Part D sponsors have a key role to play in advancing health equity. Plans can meet this challenge by driving value in care delivery, developing qualitative and quantitative metrics to ensure accountability and transparency and equitable delivery of preventive and medical benefits, and taking other concrete steps to address disparities. This includes not only offering supplemental benefits, but making sure that these benefits address the most critical care gaps and barriers to care while complying with the requirements for supplemental benefits. Please visit the CMS OMH Health Equity Technical Assistance Program webpage for additional resources to support your organization's health equity initiatives.

6 CMS/Agency-Information/OMH/equity-initia tives/Health-Equity-Technical-Assistance . We welcome your comment on these efforts to pursue health equity in the MA and Part D. programs. To submit comments or questions electronically, go to , enter the docket number CMS-2022-0021 in the Search field, and follow the instructions for submitting a comment.. Comments will be made public, so submitters should not include any confidential or personal information. In order to receive consideration prior to the release of the final Announcement of CY 2023 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (Rate Announcement), comments on this Advance Notice must be received by 6:00 PM Eastern Time on Friday, March 4, 2022.

7 /s/. Meena Seshamani, , Director, Center for Medicare I, Jennifer Wuggazer Lazio, am a Member of the American Academy of Actuaries. I meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained in this Advance Notice . My opinion is limited to the following sections of this Advance Notice : The growth percentages and United States per capita cost estimates provided in Attachment I; the qualifying county determination, calculations of Fee for Service cost, direct graduate medical education carve-out, kidney acquisition cost carve-out, IME phase out, MA. benchmarks, EGWP rates, and ESRD rates discussed in Attachment II; Medicare Part D Benefit Parameters: Annual Adjustments for Defined Standard Benefit in 2023 described in Attachment III; and the economic information contained in Attachment V.

8 3. /s/. Jennifer Wuggazer Lazio, , Director Parts C & D Actuarial Group Office of the Actuary Attachments 4. 2023 Advance Notice . TABLE OF CONTENTS. Attachment I. Preliminary Estimates of the National Per Capita Growth Percentage and the National Medicare Fee-for-Service Growth Percentage for Calendar Year 2023 ..7. Section A. Data and Assumptions Supporting USPCCs ..8. Section B. 2023 Growth Percentage Section C. USPCC Estimates ..12. Section D. Loading for Claims Processing Costs ..16. Attachment II. Changes in the Payment Methodology for Medicare Advantage and PACE. for CY 2023 ..18. Section A. MA Benchmark, Quality Bonus Payments, and Rebate ..18. A1. Applicable Amount.

9 18. A2. Specified Amount ..18. A3. Quality Bonus Payment Percentage ..20. A4. Qualifying County Bonus Payment ..22. A5. Cap on Benchmarks ..23. A6. Section B. Calculation of Fee for Service Cost ..24. B1. Introduction ..24. B2. AGA B3. Adjustments for Medicare Shared Savings Program and Innovation Center Models and Demonstration Programs ..26. B4. Additional Adjustment to FFS per Capita Costs in Puerto Rico ..29. B5. Additional Section C1. Direct Graduate Medical Education ..31. Section C2. Organ Acquisition Costs for Kidney Transplants ..33. Section C3. IME Phase Out ..35. Section D. MA ESRD Rates ..35. Section E. Location of Network Areas for Private Fee-for-Service (PFFS) Plans in Plan Year 2024.

10 38. Section F. MA Employer Group Waiver Plans ..38. Section G. CMS-HCC Risk Adjustment Model for CY 2023 ..42. Section H. End Stage Renal Disease (ESRD) Risk Adjustment Models for CY 2023 ..43. Section I. Medicare Secondary Payer (MSP) ..58. Section J. Frailty Adjustment for PACE Organizations and FIDE SNPs ..58. Section K. Medicare Advantage Coding Pattern Adjustment ..60. Section L. Normalization Factors ..60. L1. Normalization for the Part C CMS-HCC Models ..64. L2. Normalization for the CMS-HCC ESRD Dialysis Model ..65. 5. L3. Normalization for the CMS-HCC ESRD Functioning Graft Model ..65. L4. Normalization for the RxHCC Model ..66. Section M. Sources of Diagnoses for Risk Score Calculation for CY Attachment III.


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