Acceleration of EDPS Program Poses Revenue Risks to Medicare Advantage Plans

As a Medicare Advantage plan, you are currently navigating the evolving complexities of stratifying and documenting risk and managing clinical care for an aging population which directly impacts your bottom line. Next year, you will face a new set of risk-management challenges.

The Centers for Medicare and Medicaid Services (CMS) recently released the 2017 Medicare Advantage and Part D Rate Announcement and Call Letter stating that the agency will adjust the process for calculating risk-adjusted payments, placing new demands on health plans struggling to keep pace with existing regulatory requirements.

CMS is increasing risk-score weighting for diagnoses derived from the Encounter Data Processing System (EDPS) from 10% to 25% while decreasing the weighting for diagnoses derived from the Risk Adjustment Processing System (RAPS) from 90% to 75%. The increase from 10% to 25% EDPS weighting may have you worried about the additional cost and resource expenditures that will occur.

Both the RAPS and EDPS systems provide a means for you to submit data regarding members’ medical diagnoses and health status to CMS, which reimburses your plan for covering higher-risk members. The RAPS system has been in use since 2004; the EDPS system has been in use since 2013.

Although EDPS isn’t exactly new, you may not have been paying close attention to the accuracy or efficiency of your EDPS data submissions because it has had little or no impact on revenue. Now that EDPS is going to have a major effect on your financial bottom line, you might find your plan scrambling to take steps to improve EDPS data accuracy and the efficiency with which submissions take place.

CMS is putting greater emphasis on EDPS because these submissions include approximately 1,200 data fields dealing with member health while RAPS submissions, in contrast, include only eight data fields. By collecting more data about members and their diagnoses, CMS will be able to conduct a range of in-depth studies aimed at improving the health of Medicare Advantage members and the cost-effectiveness of the program. CMS states in the Call Letter that they intend to completely phase out the use of RAPS data by 2020.

This increase in data-reporting requirements from a relatively new source will almost certainly lead to an increase in errors. If CMS finds errors, it will send the faulty submissions back to your plan, and you are given the opportunity to correct and resubmit the data. If your plan fails to accurately document and report member risk, you stand to lose out on risk-adjusted revenue.

If you have already established high precision and high efficiency EDPS programs, the proposed change will have little effect on your day-to-day operations. But, if your plan is behind the curve, additional resources may have to be directed at such areas as risk adjustment and EDPS services, provider relations, and claims processing.

The focus should be on making sure that providers correctly code their claims and that your plan’s administrative systems process claims in a way that is consistent with CMS requirements. Analytics tools will be crucial in identifying patterns of high risk member and provider data that may merit a closer review for accuracy.

DST Health Solutions has extensive experience with encounter data submission and specifically with CMS processing and compliance requirements for health plans that need help with the EDPS transition. Our EDPS solution supports Medicare Advantage plans by providing accurate and timely encounter data submissions to CMS.

DST can help you master the complexities of healthcare. Our integrated risk, clinical, and quality management solutions can help you discover business opportunity by positively impacting revenue, reducing administrative costs, and optimizing member outcomes.

We would like to talk to you about your specific opportunities, so please call at us at 800.272.4799.

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