- The American Medical Group Association (AMGA) recently commended CMS for decelerating the transition to using encounter data as a means for risk-adjusting Medicare reimbursement to Medicare Advantage organizations in 2018.
In an announcement last week, CMS revealed that Medicare will continue to determine risk scores using a less aggressive blend of diagnoses from the Risk Adjustment Processing System (RAPS) as well as fee-for-service data and diagnoses from the Encounter Data System. The blend will be 75 percent RAPS diagnoses and fee-for-service data and 25 percent Encounter Data System diagnoses, just like the 2017 blend.
The federal agency started to risk-adjust Medicare Advantage reimbursements using some encounter data in 2015. Prior to encounter data inclusion, Medicare Advantage organizations gathered and filtered their own diagnosis codes to create RAPS files for submission to CMS. Under the Encounter Data System, though, the organizations send unfiltered data to CMS, where the federal agency will find the diagnosis codes and use them for risk-adjusted payments.
Until Medicare Advantage organizations developed encounter data strategies, the federal agency blended the risk scores derived from both the RAPS and Encounter Data System, with more emphasis on RAPS data.
In 2017, CMS proposed to significantly increase the weight that encounter data had on risk adjustments. The proposal stated that the risk scoring methodology would go from 90 percent RAPS and fee-for-service data and 10 percent Encounter Data System diagnoses to 75 percent and 25 percent, respectively. The equal blend aimed to help Medicare Advantage organizations and their providers transition to using more encounter data at a “reasonable progression.”
However, CMS altered and finalized the risk adjustment methodology for 2017 Medicare Advantage reimbursement a couple months later. Instead of half and half, the federal agency implemented the 75-25 percent thresholds.
Medicare advantage organizations will continue to receive risk-adjusted Medicare reimbursement based on the finalized 2017 blend, representing a deceleration in the encounter data transition.
AMGA welcomed the 2018 delay in boosting encounter data’s weight when determining Medicare Advantage reimbursements.
“This slowdown in the transition to encounter data is a welcomed development,” Donald W. Fisher, PhD, CAE, AMGA President and CEO, stated in a press release. “Accurate data is vital to ensuring payments are fair.”
AMGA stood by its March 2016 comments on the proposed equal blend of RAPS and encounter data for 2017 Medicare reimbursements to Medicare Advantage organizations. The organization stated that “moving toward a more heavily weighted EDS [Encounter Data System] risk score will further exacerbate already existing problems with accurate EDS reporting.”
Medicare advantage organizations and their healthcare providers face several challenges with submitting encounter data. For example, the stakeholders must ensure that encounter data are accurate and complete because their Medicare reimbursement depends on it.
Stakeholders may also run into diagnosis code troubles with encounter data. Medicare Advantage organizations used to filter and submit their own diagnosis codes, but codes accepted by the RAPS may not necessarily be accepted in the Encounter Data System.
Medicare Advantage organizations and their providers need to understand the federal agency’s filtering methodology to avoid inaccurate Medicare reimbursements.
A recent Government Accountability Office (GAO) report also found that CMS is not prepared to adequately adjust Medicare Advantage payments for risk based on encounter data.
“CMS has begun compiling basic statistics on the volume and consistency of data submissions and preparing automated summary reports for MAOs [Medicare Advantage organizations] indicating diagnosis information used for risk adjustment,” GAO stated. “However, CMS has yet to undertake activities that fully address encounter data accuracy, such as reviewing medical records.”
AMGA noted in its 2016 comments that “data accuracy is critical because there is a positive correlation between reported encounter volume per patient per year and risk scores.”
CMS did not reveal in its most recent 2018 Medicare Advantage reimbursement announcement when it plans to accelerate the encounter data transition, meaning Medicare Advantage organizations and their providers have at least another year to prepare.