The Centers for Medicare and Medicaid Services (CMS) released the final rule for the Notice for Benefit Payment Parameters-2023 (NBPP-2023). This is the ACA marketplace play book. In their draft rule, CMS had wanted to change the risk adjustment system with the goal of improving prediction of expected costs for people who have no coded chronic conditions. I and several others were aghast at both the proposed change and the prior white paper that supported the proposed change. I sent in comments.
Figure 2.3 is extraordinarily concerning. The two-stage weighted model markedly improves predictive value for individuals with 0 HCC who have low PMPM while making the predictive ratio no better and often marginally worse for individuals with two or more HCC. Individuals with two or more HCC have significant claim dollar weight. Table 4.1 shows that the bottom 7 deciles of risk scores constitute ~16.3% of total claims liability. Adjusting the models to shift resources to these populations that are primarily purchasing plans on the basis of premium will further encourage insurers to compete by avoiding risk even more aggressively.
Many other stakeholders sent in similar comments.
And CMS listened:
We proposed to use a two-stage weighted model specification to recalibrate the adult and child risk adjustment models starting with the 2023 benefit year to improve the underprediction of plan liability for the lowest-risk enrollees (that is, enrollees in low-risk deciles and enrollees without HCCs39). For a full description of the proposed two-stage weighted model specification see the proposed rule (87 FR 599 through 601). We sought comment on the two-stage weighted model specification proposal.
After reviewing the public comments, we are not finalizing the adoption of the two-stage weighted model specification….
Conversely, several other commenters opposed the implementation of the proposed two stage weighted model specification. Several commenters were concerned that the proposed two stage weighted model specification would have anti-competitive effects, leading to fewer choices for consumers. These commenters stated that the two-stage weighted model specification would increase premiums on more generous health insurance coverage, incentivize issuers to adopt narrow networks and lower-quality plans, encourage issuers to avoid enrolling consumers with chronic illnesses, and contribute to the creation and use of discriminatory benefit designs.
When you see federal regulations that touch on areas of interest and potential expertise and those proposed regulations could lead to bad policy —- comment! You’re not always going to get the agency to do what you want, but there is a chance that if the agency gets enough push back that they’ll change their mind.
This is an act of good citizenship and good policy, so be engaged and comment when you can bring knowledge to bear.