21st Century Cures Act: Medicare Advantage Impact

Review of Relevant Provisions with Expert Insight

March 2017

PULSE8 is privileged to bring you a summary of key Medicare Advantage program requirements within the 21st Century Cures Act. The bill was signed into law on December 13, 2016 by President Barrack Obama.

Key Medicare Advantage Requirement Update Announcements:
  • Issuance of Risk Adjustment Methodology Change Requirements (Expanded Detail Below)
  • Order for a Temporary (through 2018) Stay of Plan Termination for 5-Star Program Underachievers
  • Mandate to Allow Medicare Advantage Enrollment for ESRD Beneficiaries
  • Implementation of a 3-Month Open Disenrollment Option for All Beneficiaries

Full Impact to be Phased-In over Payment Years 2019 through 2022


The Cures Act instructs the Secretary of Health and Human Services to improve the determination methodology of a beneficiary’s health status by factoring in the count of an individual’s total conditions. Furthermore, additional adjustments are to be applied as an individual’s total number of conditions increases. In practice, these changes will raise risk capitation payments, on a sliding, “HCC count per beneficiary” scale.

  • Pulse8 foresees the development of a multiplier variable applied to an individual’s calculated HCC risk factor. The multiplier would serve to increase an individual’s base risk factor incrementally by a member’s total condition count.
  • The impact of this methodological risk score augmentation will be to spike capitation payments for beneficiaries carrying multiple conditions. Plans with relatively high “average conditions per beneficiary” will see higher PMPM capitation revenue.
Pulse8 Insight:

The value of capturing all of a beneficiary’s risk-adjusted conditions will become that much more valuable with this update. MA plans should make sure their HCC diagnosis targeting analytics include co-morbid clinical rules to adjust intervention lists accordingly. For example, plans should have analytics programming to account for the following scenario: Beneficiary X and Y have different HCC gaps with nearly equal risk factor potential. Beneficiary X’s associated conditions have a relatively high HCC co-morbidity rate, whereas beneficiary Y’s disease profile is not indicative of overlapping conditions. In this scenario, with all other variables equal, beneficiary X’s potential risk score value is now (due to the changes of the Cures Act) higher than that of beneficiary Y. The plan’s gap closure analysis and reporting should reflect this valuation to realize the higher risk to beneficiary X’s well-being.

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Categories: Risk Adjustment
Tags: risk adjustment, 21st century cures act

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