BLOG — Maintaining Stable Medicare Advantage Risk-Adjustment During COVID-19

by Michael Bagel

Medicare Advantage plans provide convenient and coordinated care to nearly 23 million seniors across the country. During this unprecedented public health crisis, seniors are relying on a robust Medicare Advantage program to offer innovative benefits that provide the coverage and care they need, where they need it.

Critical to the success of the Medicare Advantage program is stable risk adjustment, a process used by the Centers of Medicare & Medicaid Services (CMS) to adjust for each beneficiary’s specific health status. Medicare Advantage plans receive higher risk scores for seniors with higher numbers of chronic conditions and complex acuities. The higher the risk score, the greater the expected health care expenses for that beneficiary and thus a higher payment to the MA plan; the lower the risk score, the lower the expected health care expenses for that senior and the lower payment.

COVID-19 has the potential to significantly reduce Medicare Advantage risk scores and payment in 2021, creating instability in a program that millions have come to rely upon. During this public health crisis, consumers – especially seniors – have delayed accessing services. As a result, medical claims and diagnoses used in MA risk-adjustment are lower than they would have been otherwise, suggesting changes in utilization have occurred because of the pandemic.

A recent Avalere report estimated the deferral of health care for seniors in the Medicare Advantage program as a result of COVID-19 would lead to a 3-7% reduction in MA risk scores and payment in 2021 compared with 2020. And with the potential of a second wave of cases, risk scores and plan payment could decrease by even more than 7%. The impact of this decrease in risk adjustment, exacerbated by deferred care from 2020 leading to higher healthcare spending for plans in 2021, would be a massive and potentially destabilizing impact on the entire Medicare Advantage program.

Fortunately, there is a solution both tested and true – telehealth. A national poll by ACHP and AMCP found that 72 percent of U.S. consumers have dramatically changed their use of traditional in-office health care services, with many delaying in-person care and embracing telehealth. Twenty-eight percent of consumers had reported having used some form of telehealth since March – triple the number of users previously reported – and 89% of those who had used telehealth were satisfied with their experience.

Recognizing the explosion of telehealth and the vital need to maintain stability of the Medicare Advantage program, in April CMS announced that it would allow face-to-face telehealth visits to be used in Medicare Advantage risk adjustment. However, ACHP member health plans quickly realized that a large number of seniors across the country lacked access to broadband, smart phones or personal comfort to complete a face-to-face telehealth visit. These seniors turned to audio-only (telephone) to receive their health care, manage their chronic conditions and engage with their doctors. The experience of ACHP member health plans found that their audio-only telehealth visits accounted for more than 75% of total telehealth visits in March and April.

The ability of Medicare Advantage plans to offer audio-only telehealth options gives patients and providers peace of mind. Allowing plans to use the encounters for Medicare Advantage risk-adjustment will diminish the projected impact on risk-adjustment and plan payments in 2021, providing relief to millions of seniors and providers by maintaining a stable MA program without reductions in benefits or cuts to provider reimbursement.

Seniors rely on a robust Medicare Advantage program. They deserve a program that continues to provide high-quality, coordinated coverage and care during a health crisis and beyond.

Learn More about ACHP’s efforts on Medicare Advantage

Read about ACHP’s policy recommendations for tackling COVID-19