18 Aug 0
When a participant first becomes eligible for Medicare, there are no ICD9 codes on which to base a payment using the Risk Adjustment model. The reason being, that this year’s payment is based on ICD9 codes submitted from last year, and a newly enrolled participant to Medicare has no data on which to base payment. Therefore, the participant is assigned to the “New Enrollee” RA Factor Type Code. He/she will remain in that category until they have 12 months of Medicare Part B experience during the data collection period. “New Enrollee” designation uses demographic information only to calculate a risk score. The demographic coefficients are a bit higher compared to a participant, with the same demographics, who is eligible for the Risk Adjustment Model; however, the “New Enrollee” risk score results in a much lower risk score than the average participant. A typical new enrollee risk score is 1.20 compared to the average in PACE of 2.50.
Usually, a participant purchases Medicare Part B upon gaining eligibility for Part A. However, what if the individual doesn’t sign up for Medicare Part B until age 67, while they are enrolling into your PACE organization? The August 14, 2015 HPMS memo addresses two options in this case. Option 1 has you simply using the “New Enrollee” risk score as described above. Option 2 allows you to use whatever risk score generated by Medicare Part A during the data collection period. Whichever option is chosen, it is applied to all participants who so qualify. Furthermore, this choice continues until you notify CMS that your program’s decided to choose the alternative option.
Our opinion is to opt for the Medicare A payment. This is because most participants enrolling in PACE have a high hospitalization rate, and thereby have captured many ICD9 codes that will map to an HCC. As you decide which option is best, keep in mind that the decision will have a minor impact on the your revenue stream, as it is infrequent to have participants that so qualify. If you wish to have the Medicare A payment option, CMS must be notified of your decision by the end of the day on August 31st.