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2023 CMS Final Rate Announcement: What to Know and What to Do

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On April 4th, the Centers for Medicare and Medicaid Services (CMS) finalized 2023 payment rates and a variety of policy changes for Medicare Advantage (MA) and Part D plans. The Final Rate Announcement (formerly known as “the Call Letter”) finalized a noteworthy 8.5% average revenue increase, which is more than double the 4% increase in 2022 and reflects CMS’ commitment to the stability of the MA program and the health of the more than 28 million beneficiaries enrolled in the program. With more than 40% of beneficiaries enrolled in MA in 2022, and projected enrollment to increase to 50% by 2030, this news is a major boost welcomed throughout the industry.

As is always the case, CMS also used the 2023 Final Rate Announcement to update a variety of Star Rating issues. Here are 3 important things to know, and 3 things to do now:

3 Things to Know

  • Most of the Advance Notice proposals can move to Rulemaking: Despite the significant comments received from the industry, CMS continues to forge ahead with the long list of potential changes to Star Ratings presented in the Advance Notice. Though many of the most significant proposals focusing on health equity will be implemented over several years, there remains a long list of changes from the Advance Notice that are eligible for implementation through rulemaking in 2023 and 2024. 
  • CMS is giving plans relief with a longer runway for transition to Electronic Clinical Data Systems (ECDS): In response to the significant feedback received from health plans, CMS is delaying the transition of the Colorectal Cancer Screening measure to ECDS to MY2024 to allow plans adequate time to prepare for this significant change. 
  • The Final Rate Notice clears the path for Rulemaking to effectuate change: The 2018 Final Rule changed the purpose of the Final Rate Notice, and it is no longer the source of Star Ratings program and technical changes. Rather, the Advance Notice and Final Rate Announcement now serve as CMS’ vehicle for announcing potential new measures and program changes and soliciting feedback on such changes so that future rulemaking to implement changes can adequately reflect public opinion. 

Based on the updates from the Final Rate Notice, the current slate and timeline of potential programs changes is as follows: 

Blog-Embedded-Call-Letter-2023

3 Things to Do Now

  • Future-proof your workplan: High-performing plans have always proactively embraced program changes in advance of their official addition to Stars by CMS, and the current proposals for 2023 and 2024 will require intentional, sustained work as quickly as you can possibly get things moving. Develop strategies, tactics, budget requirements, and a timeline that addresses the full spectrum of process changes, operational adjustments, and technology changes you will need for success across every department in the organization. Even if the actual work towards potential 2023/2024 changes is unrealistic given more urgent 2022 measure needs, at least socialize the work needed to ensure staff and leaders have time to understand and embrace the looming changes and can accelerate completion of current work to allow future focus on these new areas.
  • Acknowledge Reality: After so many years with so very little change to Star Ratings, many Stars teams were able to limp along through the pandemic without needing the level of leadership and budget attention that is currently necessary to support the hard decisions and work which will be required for success. It will take more time, intense focus, and different investments to improve CAHPS, reduce disparities, re-embrace the HOS PROMs measures, and transition to an ECDS HEDIS model—which may include longitudinal and real-time clinical measures sooner, rather than later. Prepare leadership for longer, harder discussions about Star measures and needs during 2nd and 3rd quarter. Be open about organizational weaknesses and service area challenges and compensate for them in your workplan. And when you encounter the inevitable pushback, complaints, and resistance to change, acknowledge the resistance and remedy it quickly.
  • Integrate Health Equity into Everything: If you haven’t begun addressing Health Equity through an MA lens with Stars precision, start right now. On April 21st, CMS outlined its action plan to improve health equity across the agency, including Medicare Advantage, Medicaid, and ACA Marketplace plans. CMS has made it clear that health equity will be embedded in the DNA of the regulatory organization, and their proposals to integrate health equity into Stars are significant. CMS’ plan calls for closing gaps in outcomes, access, and quality care for underserved populations; promoting culturally and linguistically competent services; expanding and standardizing the collection and use of data; supporting safety net providers; and using the national quality strategy to promote the highest quality outcomes and safest care for all people. Make sure your Stars workplan contains specific, explicit efforts towards every element of the CMS health equity focus and begin discussing these issues with specificity in every meeting and on every agenda. With new accountability and permission to transparently discuss and address challenging and sensitive topics such as race, culture, finances, social risks, etc., our work will become exponentially more tangible and meaningful.

After a busy 1st quarter filled with onboarding, transitioning to new benefits and formularies, completing HRAs and HEDIS Medical Record Review, and so many other high priorities, many plans are ready to settle into an easier spring and summer until the traditional 4th quarter push gets started. For the past few years, that has been quite feasible.

But that simply will not work in 2022. Our members’ experiences getting appointments and needed care, getting their medications, and getting information and services this summer will serve as their basis for CAHPS responses. Our work needs to be continuous so we can drive our desired improvements this summer.

We know how hard it is to succeed in Stars in an era of change, when decisions must be made with no safety net and when the risks and stakes are high. Every expert on our team has Stars experience during periods of significant change and demonstrated track records of achieving 4+ stars during these high-stake times. If you need help navigating these regulatory changes and achieving your goals, contact me at Melissa.Smith@Healthmine.com for more information. 

Melissa is a well-known thought leader and healthcare strategist with proven success developing enterprise-wide solutions to improve Star Ratings, HEDIS scores, quality performance, health outcomes, and the member experience. As EVP of Healthmine’s advisory division, she helps clients evaluate market dynamics and opportunities, optimize distribution channels, and fulfill strategic planning needs.

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