Medical Billing Companies
American Medical Group Association

In recent news, the latest proposal put forward by CMS was duly supported by the American Medical Group Association (AMGA). The proposal submitted by CMS was to delay the increased use of Medicare encounter data, which was used for determining claims reimbursement amounts and Medicare Advantage Plan risk scores.

In the proposed rule, the officials from CMS indicated that they would keep the 2017 blend of 75 percent Risk Adjustment Processing System data and 25 percent encounter data, instead of increasing the weight of encounter data to about 50 percent as they previously projected.

The President and CEO of AMGA, Donald W. Fisher said that, “This delay is a welcome development. AMGA and the GAO [Government Accountability Office] have pointed out concerns about the accuracy of Medicare Advantage encounter data. It’s encouraging that CMS is acting on our recommendations.”

Reports indicate that CMS utilizes the diagnosis presented by Medicare Advantage organizations and Medicare fee-for-service providers in order to determine Medicare Advantage Plan’s risk payment scores. It is also noted that the Federal agency heavily relied on Risk Adjustment Processing System (RAPS) until a few months ago.

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Medicare Advantage Plan

Medicare Advantage organizations and health care providers were able to gather and filter their own diagnosis codes through the RAPS though. The collected and filtered codes were then sent to CMS for calculating the risk scores. Consequently, Medicare Advantage beneficiaries with a higher risk score received a greater base rate, which in turn resulted in a higher Medicare reimbursement amount.

CMS announced that they would use more encounter data for determining the Medicare Advantage risk score from now on. Encounter data offers detailed information on treatments and diagnoses for all healthcare service and on the items that are furnished to a beneficiary. In fact, the Encounter Data System was developed by the federal agency back in the year 2015 and they had implemented it in the same year for calculating the risk scores.

The federal agency significantly increased encounter data’s percent weight to about 27 percent in the beginning of 2017. In addition to that, they also announced their future intentions to raise the weight to 50 percent by the year 2018. However, several healthcare stakeholders shared their concerns by stating that speeding up the transition to encounter data for determining claims reimbursement amounts was a bit premature.

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