{"id":15527,"date":"2019-03-18T09:34:26","date_gmt":"2019-03-18T13:34:26","guid":{"rendered":"https:\/\/avalere.com\/?p=15527"},"modified":"2021-04-16T16:40:13","modified_gmt":"2021-04-16T20:40:13","slug":"cms-methodology-for-calculating-payment-errors-may-result-in-underpayments-to-health-plans","status":"publish","type":"post","link":"https:\/\/advisory.avalerehealth.com\/insights\/cms-methodology-for-calculating-payment-errors-may-result-in-underpayments-to-health-plans","title":{"rendered":"CMS Methodology for Calculating Payment Errors May Result in Underpayments to Health Plans"},"content":{"rendered":"<p>The final methodology included an offset known as the Fee-For-Service (FFS) Adjuster, which was intended to account for the different documentation standard used to develop the MA risk-adjustment model. CMS would calculate the amount of the FFS Adjuster based on a review of medical records submitted to support FFS claims. Although the amount of the FFS Adjuster had not been released by CMS, an internal CMS study estimated that diagnosis coding errors in the FFS claims data had a negative payment on the MA risk adjustment model between 4.8% and 8.1%.<\/p>\n<p>In a recently <a href=\"https:\/\/s3.amazonaws.com\/public-inspection.federalregister.gov\/2018-23599.pdf\">proposed rule<\/a>, CMS announced that it intends to revise its RADV methodology to exclude the FFS Adjuster in its payment recoupment calculations. CMS cites a new <a href=\"https:\/\/www.cms.gov\/Research-Statistics-Data-and-Systems\/Monitoring-Programs\/Medicare-Risk-Adjustment-Data-Validation-Program\/Other-Content-Types\/RADV-Docs\/FFS-Adjuster-Excecutive-Summary.pdf\">internal study<\/a> finding that errors in reporting diagnosis codes in FFS claims data do not have a meaningful impact on risk-adjustment model estimation and, further, do not bias MA plan payment.<\/p>\n<p>New analysis from Avalere suggests that certain key assumptions embedded in CMS\u2019 analysis do not appropriately capture the full variation in the data and minimized the impact of documentation error. Avalere tested 3 alternatives to the assumptions made by CMS, comparing the results. Avalere\u2019s analysis finds that audit miscalibration bias yields underpayments of nearly 8%. Avalere\u2019s analysis suggests that a root cause of the difference in the Avalere and CMS estimates of the audit miscalibration impact may be CMS\u2019 assumption of the average number of claims in calculating HCC person-level error rates, which underestimates the error rate.<\/p>\n<p>Download the <a href=\"https:\/\/advisory.avalerehealth.com\/wp-content\/uploads\/2019\/03\/20190318-FFS-Adjuster-Analysis-Final-.pdf\">full report<\/a>.<\/p>\n<p><em>Funding for this research was provided by Cigna. Avalere Health retained full editorial control.<\/em><\/p>\n<p>To learn more about our modeling work, <a href=\"https:\/\/info.avalere.com\/LP=46\">connect with us<\/a>.<\/p>\n<p>Find out the <a href=\"https:\/\/advisory.avalerehealth.com\/webinars\/avalere-2020-healthcare-industry-outlook-see-the-turns-ahead\">top 2020 healthcare trends to watch.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The final methodology included an offset known as the Fee-For-Service (FFS) Adjuster, which was intended to account for the different documentation standard used to develop the MA risk-adjustment model. CMS would calculate the amount of the FFS Adjuster based on a review of medical records submitted to support FFS claims. Although the amount of the&hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[],"content-categories":[259],"class_list":["post-15527","post","type-post","status-publish","format-standard","hentry","category-insights","content-categories-policy","entry","no-media"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>CMS Methodology for Calculating Payment Errors May Result in Underpayments to Health Plans | Avalere Health Advisory<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/advisory.avalerehealth.com\/insights\/cms-methodology-for-calculating-payment-errors-may-result-in-underpayments-to-health-plans\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CMS Methodology for Calculating Payment Errors May Result in Underpayments to Health Plans | Avalere Health Advisory\" \/>\n<meta property=\"og:description\" content=\"The final methodology included an offset known as the Fee-For-Service (FFS) Adjuster, which was intended to account for the different documentation standard used to develop the MA risk-adjustment model. CMS would calculate the amount of the FFS Adjuster based on a review of medical records submitted to support FFS claims. Although the amount of the&hellip;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/advisory.avalerehealth.com\/insights\/cms-methodology-for-calculating-payment-errors-may-result-in-underpayments-to-health-plans\" \/>\n<meta property=\"og:site_name\" content=\"Avalere Health Advisory\" \/>\n<meta property=\"article:published_time\" content=\"2019-03-18T13:34:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-04-16T20:40:13+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/advisory.avalerehealth.com\/wp-content\/uploads\/2018\/09\/3149-1-Robin_Duddy-Tenbrunsel_600x400.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"600\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"avalere_wp\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@avalerehealth\" \/>\n<meta name=\"twitter:site\" content=\"@avalerehealth\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"avalere_wp\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"CMS Methodology for Calculating Payment Errors May Result in Underpayments to Health Plans | Avalere Health Advisory","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/advisory.avalerehealth.com\/insights\/cms-methodology-for-calculating-payment-errors-may-result-in-underpayments-to-health-plans","og_locale":"en_US","og_type":"article","og_title":"CMS Methodology for Calculating Payment Errors May Result in Underpayments to Health Plans | Avalere Health Advisory","og_description":"The final methodology included an offset known as the Fee-For-Service (FFS) Adjuster, which was intended to account for the different documentation standard used to develop the MA risk-adjustment model. CMS would calculate the amount of the FFS Adjuster based on a review of medical records submitted to support FFS claims. 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