On January 10, 2025, the Centers for Medicare & Medicaid Services (CMS) published its Advance Notice of Methodological Changes for Calendar Year (CY) 2026. This update proposes adjustments to the RxHCC Risk Adjustment Models for Medicare Part D. These updates are critical for Medicare Advantage plans, 1876 Cost Plans, Prescription Drug Plans, and PACE organizations, as they directly impact payment policies and risk calculations.
Here’s a breakdown of the key highlights from the memo and their implications.
What Are Part D Risk Scores?
Part D Risk Scores are a measure used to determine the health status of beneficiaries and the corresponding financial risk to plans. These scores are calculated based on diagnoses and claims data, ensuring fair payments to Medicare Advantage and Prescription Drug Plans.
Key Updates in the 2026 Advance Notice
Risk Scores Posted on HPMS
CMS has made plan-level Part D risk scores available on the Health Plan Management System (HPMS).
These scores are calculated using the RxHCC models proposed in the CY 2026 Advance Notice.
Scores can be accessed under:
HPMS > Risk Adjustment Module > Proposed Risk Scores > Proposed PY 2026 Part D Model Risk Scores
Plans can enter their Contract ID to retrieve specific contract data.
Data Used for Risk Score Calculations
The posted scores are based on PY 2023 data, using diagnoses from 2022 dates of service.
These calculations provide insights into how the proposed models will affect payments and risk adjustments.
Distinct Models for Non-PACE and PACE Organizations
Non-PACE Organizations: Scores are calculated using:
The 2025 RxHCC model currently in use.
Proposed and alternate RxHCC models outlined in the 2026 Advance Notice.
Diagnoses from encounter data and FFS claims, filtered with HCPCS-based filtering logic.
PACE Organizations: Scores use:
The 2025 RxHCC model for PACE.
Proposed and alternate models specific to PACE.
Diagnoses from RAPS, encounter data, and FFS claims, filtered with specialty-based filtering logic.
Opportunities for Feedback
CMS invites stakeholders to provide feedback on the proposed updates to the risk adjustment models. To submit comments:
Visit Regulations.gov.
Enter the docket number CMS-2024-0360 in the search field.
Follow the instructions to submit electronic comments.
Why These Updates Matter
Improved Accuracy: The proposed updates refine how diagnoses are categorized and filtered, improving the accuracy of risk calculations.
Fair Payment Adjustments: By using multiple data sources (e.g., encounter data, FFS claims, and RAPS), the models ensure plans are fairly compensated based on the risk they manage.
Enhanced Support for PACE Organizations: Specialty-based filtering logic addresses the unique needs of PACE participants, who often require specialized care.
Next Steps for Organizations
Access Your Plan Data: Retrieve your organization’s Part D risk scores from HPMS and analyze how the proposed changes impact your payments.
Engage with CMS: For technical questions, email riskadjustmentpolicy@cms.hhs.gov with the subject line: 2026 Advance Notice Part D Risk Scores.
Submit Feedback: Share your insights and concerns with CMS through Regulations.gov before the deadline for public comments.
Conclusion
The 2026 Advance Notice introduces critical updates to the Part D Risk Adjustment Models, emphasizing accuracy and fairness. Medicare Advantage and Prescription Drug Plans should review these changes carefully, as they play a pivotal role in determining financial risks and ensuring equitable payments. Engaging with CMS through feedback channels can further refine these models to better serve beneficiaries and stakeholders.
Stay informed, analyze your risk scores, and contribute to shaping the future of Medicare payments!