ADVANCE NOTICE 2021 – Goodbye, raps. we barely knew you

CMS’ Advance Notice part 1 came as no surprise to the industry. Since the 2019 final notice, CMS has advised on the implementation of the 21st Century Cures Act, which requires that any changes made be phased in within 3 years. The phase in period began last year in Payment Year (PY) 2020 and is proposed to be completed by PY 2022. 

Almost All-In on APCC

For PY 2021, the two model approach continues. As we discussed in our Final Notice review from April 2019, we see that the Alternative Payment Condition Count (APCC) model continues to be phased in at 50% for PY 2020 and at 75% for PY 2021. Additionally, the CMS-HCC 2017 model continues to weigh at 50% for PY 2020 and 25% for PY 2021.

The APCC model was introduced last year for PY 2020 with 3 Additional HCCs added from the prior year model, for a total of 86. Additionally, the model has an additive RAF coefficient for HCCs greater than or equal to 4 and less than or equal to 10.

Two Data Sources – Encounter Data vs. RAPS

CMS proposes to phase in leveraging full encounter data over RAPS. In PY 2020, the split was 50% encounter and 50% from RAPS. However, in PY 2021, the proposed is encounter data at 75% and RAPS data at 25%. It is worth noting that even during this phase of the move to encounter data, the RAPS inpatient data will still be used for both data sources to calculate RAF. We believe this is because the error rates are still higher in encounter institutional data vs. professional data. 

The Bottom Line

CMS has advised that this proposed change for PY 2021 to full encounter data at 75% and the APCC model at 75% will have a 0.00% impact on RAF.  Whereas, CMS has advised that this change will have a .25% change on RAF in PY 2020. As plans close out 2019 claims lags and other supplemental sources, it will be beneficial to compare the results against this CMS benchmark.  

Ceteris Paribus – What This Change Means for Your Plan

While CMS has advised of the potential impacts to RAF for PY 2020 and PY 2021, there’s no definite answer until plans run their PY 2020 data at 50% and 75% weights for encounter and calculate their expected RAF.  In our next addition, Episource will publish a detailed view of what we see as the expected change in RAF, all things being equal.

This article by Sujata Bajaj appeared in Episource. Read more here.