policy

With a shared interest in improving risk adjustment for high-risk/high-need Medicare beneficiaries, the National PACE Association (NPA),the Special Needs Plan (SNP) Alliance and the Association of Community Affiliated Plans (ACAP) convened a workgroup of experts on payment and risk-adjustment on October 16, 2013. The objectives of the workgroup were to: (1) review the characteristics of the current Medicare risk adjustment model and the accuracy with which it predicts payments for high-risk/high-need subgroups of Medicare beneficiaries; (2) suggest opportunities for improvements to the model resulting in more accurate payments for these subgroups; and (3) identify strategies for implementing improvements to risk adjustment through research, policy analysis and
regulatory and legislative advocacy.

Health plan and provider organization members of the SNP Alliance, NPA and ACAP enroll, either exclusively or in disproportionately large numbers, individuals who are characterized as being high-risk/high need. In general, these are Medicare and MedicareMedicaid dual eligible beneficiaries with serious and multiple chronic conditions including both physical and mental illnesses. In many cases, they also require long term services and supports due to physical and/or cognitive disabilities. Additionally, because a large majority of these beneficiaries are dual eligible, they are characterized by lowincome and have related socio-economic risk factors often correlated with poor health.
Beneficiaries’ continued access to plans like PACE and SNPs that develop specialized care models in response to beneficiaries’ complex care needs depend on adequate reimbursement and, more specifically, accurate risk adjustment. While it may have been possible to absorb the effects of shortcomings in risk adjustment in the past, this is no longer possible with continued tightening of Medicare payment rates.

This report summarizes the workgroup’s discussion and identifies issues on which the group reached general consensus. It is meant to identify a range of options for improving risk adjustment for high-risk/high-need populations, and to assist NPA, the SNP Alliance and ACAP to prioritize future efforts in this area.

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