March 9, 2023
Washington, DC – Changes that the Centers for Medicare & Medicaid Services (CMS) proposes in risk adjustment for Medicare Advantage (MA) could negatively affect primary care physicians and those caring for disadvantaged Medicare beneficiaries, according to a new ATI Advisory analysis. Overall, the analysis finds that the proposed changes to risk adjustment could result in substantial redistribution of payments across different groups of Medicare beneficiaries and physicians. The ATI analysis was commissioned by America’s Physician Groups (APG), which has separately told CMS that many of its member groups anticipate similarly negative results.
The ATI Advisory study examined the effect of the risk adjustment changes on Medicare beneficiaries in the fee-for-service part of the program, so as to control for any coding effects specific to MA enrollees and to obtain more information about the effect of the changes across different demographic groups. The study considered the effect on beneficiaries with 51 health conditions grouped into 6 condition categories (diabetes, vascular, psychiatric, musculoskeletal, heart disease, and diabetes).
The findings indicate that the proposed changes will impact some beneficiaries and physicians more than others. For example, risk adjusted payments will be reduced for two-thirds (67%) of Medicare beneficiaries with diabetes. These affected beneficiaries with diabetes are more likely than the average Medicare beneficiary to be age 75 years or older, Black or Hispanic/Latino, and dually eligible for Medicaid. They are also more likely to have low income, have lower levels of education, and experience food insecurity.
“The ATI study underscores the potential effects that our groups have reported, in that they could sharply reduce payments to MA plans and our groups caring for the most disadvantaged Medicare beneficiaries,” said APG President and CEO Susan Dentzer. “Although the overall effects will be felt unevenly across plans and medical groups, those hardest hit will be the entities making the greatest efforts to serve these populations and maintain their health and wellbeing.”
“These unintended consequences are the reason that APG has asked CMS to put the proposed changes on hold for a year to further understand the effects and craft better approaches to addressing the agency’s concerns about risk adjustment,” Dentzer continued.
The ATI study identified that CMS’s plans to exclude diagnoses in the six condition categories from being used for coding linked to risk adjustment will result in fewer patient visits with physicians overall actually counting toward risk adjustment. Primary care physicians could expect significant reductions in the share of visits contributing to risk adjustment for one-third (33%) for patients with psychiatric conditions, more than one-third for patients with musculoskeletal conditions (38%) and kidney conditions (39%), and more than two-thirds (69%) for patients with vascular conditions.
Because the reasons behind these effects are poorly understood, APG wants CMS to further study the variation in impact on Medicare beneficiaries and across groups that contract with MA plans. APG remains concerned that the changes could lead to serious harm to patients, especially those that are the most disadvantaged, and have devastating effects on physician practices focused on the care of the nation’s vulnerable older adults and disabled individuals. Some of APG’s physician group members have concluded that they will face revenue cuts ranging to as much as 17 percent in caring for their Medicare patients enrolled in MA. As a result, hundreds of thousands of vulnerable Medicare Advantage enrollees could lose needed access to care.
Read the ATI Advisory analysis here.
# # #
About America’s Physician Groups
America’s Physician Groups is a national association representing approximately 360 physician groups with approximately 170,000 physicians providing care to nearly 90 million patients. APG’s motto, ‘Taking Responsibility for America’s Health,’ represents our members’ commitment to clinically integrated, coordinated, value-based healthcare in which physician groups are accountable for the costs and quality of patient care. Visit us at www.apg.org.
