Using Encounter Data in Medicare Advantage Risk Adjustment

January 2019
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The Centers for Medicare & Medicaid Services (CMS) has been collecting encounter data from Medicare Advantage (MA) plans since 2012, and has signaled potential interest in using that data to recalibrate the MA risk adjustment model. While this change would likely make risk scores more accurately reflect the costs of providing care in MA, implications for the broader MA system are unclear.

Currently, CMS has no specific proposal to recalibrate the risk adjustment model with encounter data, nor a public timeline for such a change — but CMS would need to to address many policy, technical, and operational issues prior to implementation. The Urban Institute and the American Action Forum, with support from Elevance Health and Eli Lilly and Company, convened a summit of leading experts to discuss implications of calibrating the risk adjustment model using encounter data.

The experts — who represented industry, academia, actuaries, and former CMS officials — discussed the goals of risk adjustment in MA and how using encounter data supports or undermines those goals; methodological concerns about recalibrating the risk adjustment model with encounter data; and risk adjustment’s place in the broader MA payment and policy context.

Topics

  • Goals of risk adjustment in MA
  • Uses of encounter data in the short term
  • Implications of moving to an encounter data-based risk adjustment model
  • Methodological concerns
  • Broader MA payment and policy considerations

Related Public Policy Research

Best Practices in Using Medicare Advantage Encounter Data for Healthcare Research
September 2020
Experts have raised concerns that encounter data, made available by CMS, may not be appropriate for measuring healthcare utilization or making comparisons between MA and traditional Medicare.
Understanding the Medicare Advantage Program
October 2017
MA plans provide enrollees a valuable alternative to FFS by offering out-of-pocket cost protections, additional benefits, and innovative strategies for care management and coordination.
Stabilizing the Individual Market: Risk Adjustment and Risk Mitigation
June 2017
Resolving issues related to risk adjustment and risk-mitigation measures is crucial for the individual market to function effectively, regardless of how the market rules may change.

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