“The Centers for Medicare & Medicaid Services (CMS) on Friday proposed a rule to amend the methodology for the U.S. Departments of Health and Human Services’ risk adjustment data validation (HHS-RADV) program. The technical changes, CMS said, will provide states and payers in the Affordable Care Act market with a more stable and predictable regulatory framework, promote integrity, and increase competition…”
“The risk adjustment program aims to reduce incentives for payers to ‘cherry-pick’ healthy, low-risk individuals by compensating insurers who have sicker enrollees and therefore have higher medical costs. The program transfers funds from plans with relatively low-risk enrollees to plans that have higher-risk members. The formula spreads the financial risk across the markets and allows insurers to compete with one another based on price, efficiency, and service quality.”
“Risk adjustment state transfers are calculated separately for the individual non-catastrophic, catastrophic, and small group market risk pools within a state.”
“The HHS-RADV program validates the accuracy of data that payers submit that is used to calculate the amount of money transferred among insurers based on the risks of the individuals they enroll. The process is used to ensure the risk adjustment transfers show verifiable risk differences among payers, rather than risk score calculations that are based on poor data quality.”
“The proposed rule issued on Friday would amend the methodology in the HHS-RADV program as follows…” Read the full article here.
Source: CMS issues HHS-RADV proposed rule: 4 things you need to know – By Ilene MacDonald, June 1, 2020. RISE.
