November 2024 Medicare Advantage and Prescription Drug System Updates: Essential Information

As we near the end of the year, CMS has rolled out important updates for Medicare Advantage and Prescription Drug Plans. These adjustments impact payments, risk adjustment reconciliations, and processing systems, and there’s a lot to unpack. Here’s a breakdown of what these changes mean for plan sponsors, plus tips for adapting smoothly. 

1. Risk Adjustment Reconciliation: Fixing Payment Errors 

In mid-2024, CMS identified an issue in their MARx software, which mistakenly used the wrong risk factors for certain payments to long-term institutional (LTI) beneficiaries. Payments for these beneficiaries should have reflected an LTI risk factor, but a community risk factor was used instead, leading to incorrect payment amounts: 

• Overpayments and Underpayments: For Part C (medical), LTI beneficiaries were often overpaid due to higher community risk factors. Conversely, for Part D (prescription drug), these beneficiaries were underpaid. CMS is addressing these discrepancies with payment adjustments. 

• What to Expect in November Payments: Plan sponsors will see adjustments in the November 2024 Monthly Membership Report (MMR), which will retroactively correct payments from January through October 2024. These corrections mean reduced payments overall for Part C overpayments and increased payments for Part D underpayments. 

2. Delay in 2023 Final Part D Payment Adjustments 

CMS completed the 2023 Part D payment reconciliation in September, which would typically have been included in the November payments. However, due to unforeseen circumstances, these payment adjustments are now scheduled to appear in the December 2024 payment cycle. 

• Impact on Sponsors: Plan sponsors should prepare for these changes and adjust their financial planning for the coming months to account for the December adjustments. 

3. MARx System Migration to AWS and Data Accuracy 

CMS successfully migrated the MARx system to Amazon Web Services (AWS) in July 2023. The shift to a cloud-based environment aims to improve the processing of enrollments, premiums, and payments. While the migration was successful, CMS has noted some inaccuracies in Part C and Part D risk scores due to data discrepancies: 

• Current Fixes in Progress: CMS is working to resolve these issues with software updates and data cleanups, prioritizing fixes based on the impact on payment accuracy. 

• What Sponsors Need to Know: CMS will notify plans as these cleanups are completed. If your plan has already submitted a trouble ticket, no further action is required. For broader issues affecting multiple organizations, CMS has created “master tickets” to streamline communication and prioritize fixes. 

4. Sequestration Suspension and Adjustments 

The sequestration suspension, a policy that temporarily halted Medicare payment cuts, has ended. However, CMS continues to honor sequestration suspensions for certain retroactive payment adjustments from May 2020 to March 2022. Here’s a quick breakdown of the impact: 

• Suspension Periods: Payments for May 2020 to March 2022 remain unaffected by sequestration. For April to June 2022, a 1% sequestration applies, and starting from July 2022 onward, a 2% sequestration will be applied. 

• Ongoing Adjustments: These rules will continue to apply to all retroactive payment adjustments, ensuring that sponsors receive accurate, policy-compliant payments. 

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Key CMS HPMS Updates from Summer 2024: What You Need to Know

Staying updated with the latest CMS (Centers for Medicare & Medicaid Services) releases is crucial for ensuring compliance and accuracy in Medicare Advantage and Prescription Drug Plans. Over the past few months, CMS has introduced a range of updates through HPMS, including essential corrections to model notices, changes to the 2025 RxHCC Risk Adjustment model, and adjustments to normalization factors. These updates, which will come into effect starting in 2025, ensure that plans reflect the evolving healthcare landscape, particularly around chronic conditions and beneficiary risk scores. Let’s dive into the key highlights from recent CMS releases! 

Key CMS HPMS Updates from Summer 2024: What You Need to Know 

1. 2025 RxHCC Risk Adjustment Model 

The CMS updated its Risk Adjustment model for 2025, focusing on accurate payment adjustments for Medicare Part D beneficiaries. The RxHCC model, based on 2021 diagnoses, brings significant changes to risk scoring, improving how payments reflect health conditions like diabetes and heart disease. MA-PD and PACE plans will see these changes starting January 2025. 

2. Correction to ANOC and EOC Models 

In August 2024, CMS issued corrections to several model notices for Contract Year (CY) 2025. Notable changes include: 

• Updates to inpatient hospital costs for Cost Plans. 

• Removal of telehealth service references for physical therapists, occupational therapists, and audiologists in several plan types. 

• Clarifications on appeals, emphasizing timelines and proper contact points for enrollees. 

• Adjustments to LIS Riders to eliminate unnecessary references to deductibles

3. Normalization Factors 

CMS announced updates for normalizing risk scores for MA-PD and PDP beneficiaries for 2025. This ensures that payments reflect recent changes in health care utilization and costs, ensuring fairness in payments. 

4. Updated Communication Tools 

To better serve plans, CMS has also updated the Monthly Membership Reports (MMRs) and Model Output Reports (MORs). This ensures that plan sponsors have accurate data regarding beneficiary risk scores. 

Preparing for 2025: 

With these updates, Medicare Advantage and Prescription Drug Plan sponsors must adjust their systems and communications accordingly. Compliance with these new rules and timely communication to beneficiaries is essential for a smooth transition. 

For detailed guidance, review the recent CMS releases through HPMS and ensure that your organization stays compliant with these evolving standards. 

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Navigating the 2025 RxHCC Risk Adjustment Model: Key Updates and Implications

Introduction: The 2025 RxHCC Risk Adjustment model introduces pivotal changes aimed at enhancing risk accuracy in Medicare Advantage and Prescription Drug Plans. These updates focus on refining diagnoses for chronic conditions, especially in elderly populations. 

Why the Update Matters: Risk adjustment ensures fair payments by accurately reflecting patient health status. The 2025 model's updates include significant adjustments in hierarchical condition categories (HCCs) to better capture high-risk patient profiles. 

Key Changes: 

• Increased Emphasis on Chronic Conditions: Conditions such as diabetes, heart failure, and renal disease see heightened focus, with expanded diagnosis codes capturing subtler nuances in disease progression. 

• Refined Demographic Factors: Gender, age, and other demographic variables now play a stronger role in determining risk scores. 

• Enhanced Validation Protocols: New methods ensure diagnosis integrity, reducing potential overpayments and improving overall system integrity. 

Implementation Timeline: Medicare Advantage plans must adopt these changes by January 1, 2025. Preparation should involve re-training staff on new coding practices and investing in robust diagnosis validation mechanisms. 

Impact on Medicare Advantage Providers: The changes will lead to: 

• Better Resource Allocation: More accurate payment adjustments ensure high-risk patients receive adequate care funding. 

• Compliance Complexity: The new codes and validation requirements may increase the administrative burden, prompting the need for stronger compliance frameworks. 

Conclusion: Adapting to the 2025 RxHCC model will require careful planning and execution. Providers must focus on improving coding accuracy and ensuring compliance to avoid financial risks and penalties.  

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Navigating Medicare’s Latest Data Updates: What’s New in September 2024

In the fast-evolving world of healthcare, staying up to date with the latest regulations is not just a task—it's essential for smooth operations. This September, the Centers for Medicare & Medicaid Services (CMS) is introducing a series of software updates that will impact how encounter data is processed. These changes will affect Medicare Advantage, Cost, PACE, and Demonstration organizations starting September 13, 2024. 

But don’t worry! We’ve broken down the updates for you, so you’ll be well-prepared to navigate them with ease. 

1. New Checks for Mental Health Providers: Ensuring Compliance Made Simple 

Let’s face it: healthcare is all about being in the right place at the right time—especially for providers. Edit 25080 is designed to ensure that Marriage and Family Therapists (MFTs) and Mental Health Counselors (MHCs) are practicing in the correct settings. This edit makes sure that claims from these specialists are only allowed in appropriate places like outpatient clinics. 

So, if an MFT is mistakenly registered as working in an inpatient hospital, psychiatric facility, or rehabilitation center, the system will flag it. Why does this matter? Simple—incorrect submissions can delay claim processing. Avoid the hassle by ensuring your submissions reflect the right service location for MFTs and MHCs. 

2. Social Determinants of Health: An Important Addition to Annual Wellness Visits 

We all know how important it is to capture the full picture of a patient’s health. CMS is now emphasizing the Social Determinants of Health (SDOH)—those factors like living conditions, income, and social connections that impact well-being. 

Edit 25095 ensures that when an SDOH risk assessment is done (with code G0136), it’s paired with an Annual Wellness Visit (AWV). This update means the assessment can’t be billed on its own—it needs to accompany an AWV. Why? Because integrating this with the AWV provides a more holistic view of patient care. 

Make sure both are billed together to avoid errors and deliver more comprehensive patient evaluations. 

3. Getting the Billing Right for Wellness Visits 

CMS is tightening the rules for Annual Wellness Visits (AWVs), and Edit 20715 ensures that your billing matches the allowed types of bills (TOBs). It’s a bit like ensuring you’ve picked the right form for the right process. 

AWVs should only be billed under certain categories like 12X, 13X, and 85X. If you submit the wrong one, expect delays. It’s another reason why precision in billing pays off! 

4. Home Health Claims: Don’t Forget the Details! 

For home health service providers, Edit 22510 adds an extra step to verify that claims include the correct state and county information. This helps ensure that home health encounters are accurately categorized by location. 

Starting October 1, 2024, make sure you add Value Code 85 (which identifies the state and county where services were rendered) to avoid rejected claims. Even though it’s a small detail, missing this can create significant delays, so double-check before submitting! 

5. Updated Rules for CPT Codes: Better Safe than Sorry 

Lastly, Edit 25000 focuses on the Correct Coding Initiative (CCI), which has been updated to prevent claims with certain CPT codes from being processed incorrectly. Now, even if you’ve added a modifier like 59 or XE, the system will take a closer look to ensure everything is in line. 

What’s the takeaway? Be sure your CPT codes—particularly 77427, 92012-92014, and 99201-99499—follow the latest guidelines. Submissions that don’t meet the mark will trigger an error and delay payment. 

How to Stay Ahead of These Changes 

While these updates may seem like small tweaks, they have big implications for data accuracy and payment efficiency. The good news? It’s easy to stay on top of these changes with a few proactive steps: 

• Update Your Systems: Ensure that your billing software is programmed to handle the new edits. 

• Train Your Team: Make sure your staff knows the new rules so that submissions are flawless. 

• Monitor Your Submissions: Check your claims closely, especially after September 13, to catch any errors early. 

Conclusion: Adapting to a New Normal 

As CMS continues to fine-tune its processes, healthcare organizations must stay agile and informed. These new edits are here to make encounter data more accurate and ensure the smooth flow of claims processing. By adjusting now, you can avoid headaches later and keep your data submissions running smoothly. 

The September 2024 software release is just one of many steps CMS is taking to improve the Medicare program. And with a little preparation, your organization can continue delivering excellent care without missing a beat. 

Stay compliant, stay informed, and you’ll be ready for whatever comes next!

CMS Risk Adjustment Submission Deadlines

It’s that time of year again—submission deadlines for risk adjustment data are just around the corner. Let's dive into the essentials, with a twist of fun to keep you awake! 

The Why and Who 

CMS (Centers for Medicare & Medicaid Services) is reminding all Medicare Advantage Organizations, PACE Organizations, Medicare-Medicaid Plans, Cost Contractors, and demonstration plans about the crucial deadlines for submitting risk adjustment data for Payment Years (PY) 2024, 2025, and 2026. If you fit into one of these categories, keep reading! 

The What 

Risk adjustment data, including both RAPS (Risk Adjustment Processing System) Data and EDS (Encounter Data System) Data, needs to be submitted on time. And by on time, we mean by 8 PM ET on the deadline day. Any data submitted after this deadline won't be included in the respective risk score run—no exceptions! 

The How 

Here's the plan to stay ahead of the game: 

1. Initial Run: Submit your data by the initial deadline to be included in the initial risk score calculation. 

1. Mid-Year Run: Missed the initial deadline? No worries, you can still submit by the mid-year deadline to be included in this run. 

1. Final Run: Ensure all data corrections and updates are done before the final deadline, as CMS won't accept new diagnoses after this point—only deletions. 

The When 

Mark your calendars with these key dates: 

• 2025 Initial: Data from 07/01/2023 – 06/30/2024 is due by 09/06/2024 

• 2024 Final Run: Data from 01/01/2023 – 12/31/2023 is due by 01/31/2025 

• 2025 Mid-Year: Data from 01/01/2024 – 12/31/2024 is due by 03/07/2025 

• 2026 Initial: Data from 07/01/2024 – 06/30/2025 is due by 09/05/2025 

• 2025 Final Run: Data from 01/01/2024 – 12/31/2024 is due by 02/02/2026 

Next Deadline Alert! 

Heads up! The next critical deadline is for the 2025 Initial Run. Make sure your data from 07/01/2023 – 06/30/2024 is submitted by September 6, 2024. Don't let this sneak up on you—set your reminders now! 

Pro Tips for Submission Success 

• Early Bird Gets the Worm: Submit your data early to handle any potential issues like validation errors or data rejections. 

• Double-Check: Make sure your data is accurate and complete before submission deadlines to avoid last-minute scrambles. 

• Stay Updated: Keep an eye on communication from CMS for any updates or changes to submission guidelines. 

Got Questions? 

For any burning questions, email riskadjustmentpolicy@cms.hhs.gov. Make sure to use the subject line: "HPMS Memo- Deadline for Submitting Risk Adjustment Data for Use in Risk Score Calculation Runs for Payment Years 2024, 2025, and 2026." 

Remember, staying organized and ahead of deadlines can save a lot of stress—and possibly your sanity. Happy submitting! 

CMS Releases Proposal to Streamline Medicare Advantage and Part D

The Biden administration recently proposed a rule to simplify Medicare Advantage (MA) and Part D plan prior authorization and increase health equity requirements in star ratings. The Centers for Medicare & Medicaid Services (CMS) released a proposed rule for the 2024 coverage year, which includes provisions governing prior authorization, utilization management, and medical necessity determinations. The rule also limits MAOs' discretion to require the use of alternate services or settings and regulates the use of prior authorization. Additionally, CMS seeks to establish a utilization management committee and require relevant expertise for coverage determinations. The proposals are in response to concerns raised by the Office of Inspector General and Congress regarding prior authorization and aim to address the administrative burden for doctors while cracking down on misleading marketing. Overall, the proposed rule strives to improve healthcare access and quality for Medicare beneficiaries.

The proposed rule also includes a provision to add health equity requirements to the MA and Part D star ratings. CMS proposes to add a new measure to the star ratings that assesses whether a plan has taken steps to reduce disparities in healthcare outcomes and experiences among enrollees based on race, ethnicity, and other socio-economic factors. The proposed measure would be used in the calculation of the overall star rating and would incentivize plans to prioritize health equity in their operations and strategies.

In addition, the proposed rule implements several drug price provisions of the Inflation Reduction Act, including requiring drug manufacturers to provide rebates to Part D plans for price increases that exceed inflation and capping the amount that beneficiaries pay for insulin at $35 per month. This is expected to save Medicare beneficiaries significantly.

Overall, the proposed rule seeks to address some of the key challenges faced by Medicare Advantage and Part D plans, including prior authorization and health equity, while also implementing provisions to reduce drug prices and improve access to care for beneficiaries. The proposal is open for public comment until February 14, 2023, and CMS is expected to release a final rule later in the year.