RISE RAPS-EDS COLLABORATION RESEARCH PROJECT EXECUTIVE SUMMARY

Avalere analyzed data from eight Medicare Advantage Organizations (MAOs) representing 1.1 million beneficiaries in more than 30 unique plans operating across the country to understand the impact of shifting the determination of plan risk scores from the Risk Adjustment Processing System (RAPS) to the new Encounter Data System (EDS). Centers for Medicare and Medicaid Services (CMS) intends to transition gradually to EDS-based payments, starting with 10 percent of the payment based on EDS in 2016, increasing to 25 percent in 2017 and 50 percent in 2018. 

CMS has said the diagnoses captured in EDS should not be different from those identified in RAPS.  However, we found that this transition will significantly reduce the identification of diagnoses used to calculate the risk scores that reflect the disease burden of the plans membership.  Average risk scores resulting from the EDS process were 26 percent lower in the 2015 payment year (based on 2014 claims data) and 16 percent lower in the 2016 payment year (based on 2015 claims data) compared to RAPS. The lower risk scores were primarily the result of 35-40 percent fewer Hierarchical Condition Category (HCC) diagnoses identified in EDS compared to RAPS.

 The risk score differences will have significant negative implications for MAOs and the 18 million beneficiaries they serve.  As an example, using an $800 bid rate, if there had been a full transition from RAPS to EDS in 2016, this would equate to an average reduction of 16.1 percent in PMPM rates, representing a decrease of $260.4 million per year for the average plan in our study.  The 90/10 phase in in 2016 would result in a 1.6% reduction in PMPM rates which would translate to $25.2 million per-plan in lower payments on average.

 

To Read the Full Executive Summary Report, please follow either this link to the report on the RISE website  www.RISEHEALTH.ORG  or the Avalere website at http://avalere.com/expertise/managed-care/insights/impact-of-medicare-advantage-data-submission-system-on-risk-scores


Categories: Risk Adjustment
Tags: RAPS, EDS, EDPS, RAF score, CMS payment, Medicare Advantage

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