Revenue Management Bulletin

RICHMOND, VA— June 13, 2008

Health Risk Partners would like to share information from the CMS Announcement of Calendar Year (CY) 2009 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies. Careful adherence to CMS guidelines and an emphasis on thorough documentation has always been paramount for any HCC revenue enhancement program. It is even more important today as CMS has announced a new policy that has tremendous implications for all Medicare Advantage plans.

While CMS made the decision not to apply the coding intensity factor adjustment for 2009, they stated that they will apply a plan level adjustment for the plans in the data validation process. Currently, if a plan is found to have ICD-9 codes that cannot be supported by a medical record during data validation, CMS reserves the right to adjust payments only for the record or records lacking supporting documentation. Under the new plan level adjustment methodology, CMS reserves the right to extrapolate the findings of the data validation against all of a plans payment for the year. What this means is should CMS find documentation to be insufficient or non-compliant with their guidelines for any portion of records audited during data validation, they reserve the right to adjust payments for an equal portion of a plans entire population.

CMS Note to All Medicare Advantage Organizations¹

CMS will audit a subset of MA plans each year. The audit will include randomly-selected plans and targeted plans. Targeted plans will be selected based on how their risk score growth compared to FFS.

Findings from our validation studies from CY 2007 onward may inform CMS why plan average risk scores did or did not grow rapidly. This analysis will allow us to further refine our MA coding intensity adjustment. In addition, because we will have statistically-valid plan-level error estimates, we will make plan-level payment adjustments rather than adjustments to payments for specific beneficiaries whose risk scores were not supported by the medical record reviews, as we have done previously.

1. Source: CMS NOTE TO: All Medicare Advantage Organizations, Prescription Drug Plan Sponsors, and Other Interested Parties dated April 7, 2008. SUBJECT: Announcement of Calendar Year (CY) 2009 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies.