Enrollment in Medicare Advantage (MA) Plans continues to climb each year. In fact, Medicare Advantage enrollment has doubled over the last decade.
As the program takes on its increasing share of Medicare beneficiaries, staying abreast of changes and developments to the program remains more important than ever.
Next year’s changes to Medicare Advantage are both reflections of policy shifts stemming from legislation, like newfound eligibility for beneficiaries with End Stage Renal Disease, and larger forces — namely, COVID-19 and its sweeping impact on telemedicine.
Here’s six of the new developments coming to Medicare Advantage in 2021 that are most important to familiarize yourself with:
- Expanded Telehealth Coverage
According to CMS, in 2020, 77% of Medicare Advantage Plans covered telehealth services. Not only will that percentage likely be larger in the future, but the scope of practices covered by telehealth will also be increasing due to the 2021 changes.
CMS, in giving MA the option to cover a greater scope of specialties, means that practices including dermatology, psychiatry, cardiology, primary care, gynecology and endocrinology are all telehealth coverage eligible.
Telehealth will open up access to a greater range of providers than ever before — and in more parts of the country than ever before… Which brings us to the next key development.
- Rural Areas Will Have More Access to MA Coverage
CMS, in an effort to make Medicare Advantage options more widely available to rural residents, has lowered the maximum time and distance standards to participate in a Medicare Advantage Plan: The prior 90% maximum time and distance standards have been lowered to 85%.
Medicare Advantage Plans will be granted 10% credit for the percentage of beneficiaries that fall within the 85%.
- End Stage Renal Disease (ESRD) and Dialysis Patients Will Be Eligible for Medicare Advantage in 2021
On January 1, 2021 all Medicare beneficiaries with ESRD will become newly eligible for Medicare Advantage. The change is a mandate of the 21st Century Cures Act, signed by former President Obama in December 2016.
The ESRD eligibility rule change will also mean increases for 2021 in out-of-pocket limits covered under Parts A and B of Medicare Advantage. Limits will rise from $6,700 to $7,550 (in-network) and from $10,000 to $11,300 (in-network and out-of-network).
CMS is making these changes to out-of-pocket maximums to absorb the changes in beneficiary spending: Beneficiaries with diagnoses of ESRD typically incur above-average costs.
- Next Year Will Also Usher in Other Changes That Stem from the Cures Act, Including Modifications to Risk Adjustment Payment
Another 2021 change resulting from the passage of the 21st Century Cures Act is the ongoing introduction of the 2020 CMS-Hierarchical Condition Categories Model: The law requires that CMS implement changes to risk adjustment payments over a three-year period, based on the Social Security Act. Full adoption of the policy is slated for 2022.
As part of the gradual implementation process, in CY 2021 payments to Medicare Advantage organizations will comprise 75% of the risk score calculated from the 2020 CMS-HCC model, and 25% of the risk score calculated from the 2017 CMS-HCC model, representing an increase from the previous year’s 50/50 balance.
- The Use of Encounter Data to Calculate Risk Scores Will Continue to Transition to Being RAPS-Based
CMS, which calculates risk scores using diagnoses submitted by MA organizations and Medicare Fee-for-Service (FFS) claims, has in the past calculated risk scores for payment based on diagnoses submitted by MA organizations into CMS’ Risk Adjustment Processing System (RAPS).
Recently however, CMS having collected encounter data from MA organizations — which also includes diagnostic information — beginning in CY 2016 calculated a risk score using a ratio of 10% of the encounter data and 90% of the risk score via RAPS. And in subsequent years, the risk calculation as a percentage of encounter data has increased, and will continue to do so in 2021, with a proposal being finalized by CMS to calculate risk scores for payment to MA organizations as 75% of the encounter data-based risk score and 25% of the RAPS-based risk score.
- On Par With Statutory Regulations, Medicare Advantage Will See a Coding Pattern Adjustment in 2021
Annually, CMS adjusts plan payments to reflect diagnostic coding discrepancies between MA organizations and FFS providers. For CY 2021, CMS is finalizing the proposal to apply a coding pattern adjustment of 5.90% — the minimum adjustment for coding intensity per the statute.
While on the topic of Medicare Advantage, be sure to note the program’s impending deadlines:
- November 30, 2020 through December 8, 2020 is the 5-star Special Enrollment Period for Medicare Advantage policies, where beneficiaries can opt to sign up for a five-star Medicare Advantage Plan.
- Medicare Advantage Open Enrollment will commence January 1, 2021 and will end on March 31, 2021.
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