CMS announced this year that Risk Adjustment Factor (RAF) will be entirely calculated through the Encounter Data Processing System (EDPS). This announcement comes ten years after CMS announced its intention to calculate 100% of risk adjustment payments using encounter data and more than six years past the originally planned implementation date. Beginning in 2022, CMS will cease using a blend of encounter and Risk Adjustment Processing System (RAPS) data and move to base 100% of the Risk Adjustment Factor on diagnoses from Medicare Advantage (MA) encounter data and fee-for-service claims. The long runway should lessen the industry impact, but the effects will be largely dependent on how organizations have prepared for the change.
Since 2015, CMS has been using a blend of EDPS and RAPS-based data, with the percentage of RAF based on EDPS increasing year-over-year for risk scoring. This gradual move to EDPS presented an opportunity for Medicare Advantage Organizations (MAOs) and their partners to develop and improve operational measures and overcome financial challenges needed to move away from the RAPS format to the 5010 X12 837 encounter data format. The EDPS system is far more complex, as it uses 837 encounter data for submission rather than a much simpler file build in RAPS. CMS and their partners encouraged MAOs to use this transition period to sharpen their procedures with recommended internal exercises.
- Monitor the gaps between EDPS and RAPS submissions to identify and address obstacles that would prevent the submission of complete and accurate data.
- CMS introduced a number of metrics intended to improve data completeness and accuracy and to move the industry closer to the goal of RAF calculation based on 100% EDPS.
- MAO familiarity of these metrics is key for efficient operations.
- Understand the policies and procedures to qualify EDPS submissions,
- The move to 837 encounters comes with increased complexity and required procedural checkpoints along the way.
- Error correction and remediation of rejected items can be more complex with EDPS than with RAPS.
Impact on the industry, and more specifically MAOs, will be based on preparedness. Organizations that followed the above recommendations from CMS will likely have a different experience than those not as well prepared. The good news is there is still time to implement these exercises and address the potential impact to reimbursement and revenue flow.
Sound best practices in data governance and strategies based on the effective use of business intelligence and technology can limit the effects of the EDPS-only world. MAOs will want to consider these three key program characteristics:
- Consider the timing of Submission "Sweeps" Deadlines
- Although CMS announced a full cutover to EDPS for PY2022 (which applies to 2021 dates of service), adjustments and extensions of submission sweep deadlines mean that managing the runout of your RAPS data will be equally important.
- Maintain RAPS processes to support reconciliation, gap identification and overall integrity of the RAF calculations.
- Calculate increased Financial Impact of Incomplete/Inaccurate Data
- Quantify the financial impact of incomplete or inaccurate EDPS data on member RAF.
- Aggregate your results across the entire MAO membership for an overall financial picture.
- Accelerate data integrity and reconciliation processes
- Apply reconciliation to both claims and supplemental data as a best practice.
- Identify RAF differences that may exist between RAPS and EDPS submissions. If the advanced submission requirements and filtering logic for EDPS are causing encounters that would otherwise be accepted by RAPS to be rejected by EDPS, you could be leaving money on the table.
- Evaluate whether current CMS submission processes result in complete and accurate data without filtering or truncating any eligible data.
- Employ extensive pre-submission editing to ensure the quality of the data provided to CMS meets compliance with submission guidance. This results in higher acceptance rates and minimizes errors, ensuring that your data is available to support RAF calculations.
How prepared are you? At SS&C Health, we understand that moving to encounter data for calculating 100% of risk adjustment is a big transition. Regardless of where you are on the preparedness spectrum, you can take advantage of working with an experienced partner. We offer a team of subject matter experts who understand encounter submissions in detail and are ready to employ our proven solution to help you make this transition. For more information on our solution, download the "Encounter Submission Services" brochure and contact us to start the conversation towards EDPS-only submissions.