Risk Adjustment: Key Trends for 2021 — and Beyond

Amid the enormous effects of the COVID-19 pandemic—and the potential upheaval of the presidential election—stakeholders in the provider and payer communities will still want to take time to examine these key points and trends which DataLink has identified for their material impact upon business and financial performance.

Please review the Centers for Medicare & Medicaid Services’ (CMS) Part I of the Calendar Year (CY) 2022 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies Part I.

MA has been effective at providing Medicare beneficiaries with health care options that best fit their individual health needs. The MA program brings the value of private sector innovation and creativity to a government program, and CMS is committed to continuing to bolster MA by promoting greater innovation, transparency, flexibility and program simplification.

 As we head into an uncertain 2021, DataLink’s Evoke360 point-of-care solution can effectively enable providers to identify open care gaps for proactive closure and provides payer-agnostic data to inform clinical, quality and risk adjustment programs for improvements in quality, risk adjustment scores and patient outcomes.

Risk Adjustment

Lower than anticipated risk scores would have an impact on payments for MA plans due in part to how CMS calculates payment plans. Lower risk scores could mean that plans would not receive payments equivalent to their expected costs in upcoming year and deferred care from 2020 could lead to higher healthcare costs for plans in 2021. Plans are prioritizing telehealth patient outreach as a strategy for revenue risk mitigation for next year.

At DataLink, we expect that CMS may allow diagnoses from audio-only telehealth encounters to count for risk adjustment during may also supplement 2021 risk adjustment data with a three-year lookback of diagnosis data for chronic conditions given the static nature of these conditions.

Risk Score Calculations

CMS proposes to fully phase in the 2020 CMS-HCC model per requirements from the 21st Century Cures Act, which means for CY 2022, one-hundred percent of risk scores will be calculated using diagnoses from MA encounter data and fee-for-service (FFS) claims. This proposal would end blended risk scores that calculated risk scores using 75% of risk adjustment eligible diagnoses from encounter data, FFS claims and risk adjustment payment system (RAPS) data and 25 percent using risk adjustment eligible diagnoses from RAPS data and fee-for-service claims.


CMS is working 24/7 to equip the American healthcare system with maximum flexibility to respond to the COVID-19 public health emergency. The CY 2022 Advance Notice represents their focus on implementing policies that ensure continuous and predictable payments across the health care system and that care can be provided when and where it is needed.

Health plans are prioritizing telehealth member outreach as a strategy for revenue risk mitigation for 2021. Virtual health maximizes effectiveness by identifying barriers to engagement, anticipating patient and provider needs and technology challenges. Going forward the feasibility of virtual care must be determined and maintained with the goals of continuous improvement.

Provider Engagement

Point-of-care tools are essential for provider engagement. They can provide insights via care workflow for patient encounters and find missed codes based on visit documentation/prior diagnosis.

Boosting Star Ratings

Risk adjustment can boost Star ratings by closing gaps in care. The key is to optimize provider workflow using an encounter solution tool, such as Evoke360, that addresses quality care gaps and effects quality care gap data prioritization. Education and resource alignment are also required. In terms of risk/value-based contracting, it’s important for a health plan to know where they are heading.

The 21st Century Cures Act

The interoperability provisions of the 21st Century Cures Act to promote patient control over their own health information while protecting privacy and cybersecurity makes many needed changes and has the potential to increase patient access to their health records. The Department of Health and Human Services (HHS) now needs to take steps to increase the speed of implementation.

Greater health information sharing will be important to further the adoption of telehealth services that often require multiple providers, tools and business associates.

Although the Cures Act Final Rule was published in March, CMS quickly determined that the deadline for compliance of January 2, 2021, could be unreasonable given the COVID-19 strain on resources. Interoperability presents practical systems development challenges that if addressed poorly can create significant cybersecurity and privacy issues. Fortunately, CMS and the Office of the National Coordinator for Health Information Technology (ONC) delayed the many of the requirements for compliance in the Rule.

Patient Consent
OCR reiterated that HIPAA was intended to allow for the sharing of information without the consent of the patient as necessary for treatment. To mitigate privacy concerns, it is important to educate providers and the public that this form of health information sharing is necessary. As COVID-19 contact tracing efforts bring more attention to privacy, it will be imperative to communicate to the public the importance of the exceptions to consent requirements.