A new analysis by the health care consulting firm uses Medicare Advantage (MA) claims data through June 2020 to estimate the impact of the reduction in claims on risk scores and payments for 2021.
The Centers for Medicare & Medicaid Services (CMS) uses diagnosis data from claims to calculate MA risk scores that are then used to adjust MA plan payments. But because diagnosis from the 2020 claims will be used to determine 2021 risk scores, the report notes that fewer claims in 2020 may mean lower risk scores, even though the health status of MA members have not changed. “Consequently, risk scores may not fully reflect the cost of care,” the analysts noted.
The Avalere analysis, which was funded by the Better Medicare Alliance, used MA claims data from 324 millions patients who were enrolled in a MA plan between January 2019 and June 2020. Unsurprisingly, given the COVID-19 pandemic, the number of MA enrollees with at least one claim was 47 percent lower in April 2020 compared to April 2019, according to the report. Overall, the total number of claims decreased by 66 percent.
To estimate the potential impact of COVID-19 on MA plan payments, the analysts calculated the 2020 midyear score to use as a baseline and the initial score for 2021 (which only accounts for the first four months of the pandemic). The result: An estimated 3.5 percent decrease in health care utilization, which leads to a 2.39 percent decrease in payment.
Using three different model scenarios based on different levels of assumed utilization for July-December 2020, the research team said risk scores could decrease between 6.3 percent and 9.6 percent, which could lower payment to MA plans up to 6.1 percent.
The analysis suggests that MA plans prepare for the long-term impacts of the pandemic. If MA members avoided care for their chronic illnesses during the pandemic, they may become sicker and need more expensive interventions, the report noted. Meanwhile, plans may face lower payments and challenges managing care due to the ongoing pandemic.
“Plans will need to continue to adjust their strategies to account for the longer-term implications of deferred care and use telehealth and other flexibilities to mitigate the impacts,” the report concluded.