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Three Important Updates Impacting ACA Compliance | Edifecs

Written by Edifecs | Aug 1, 2024 4:00:00 AM
The Department of Health and Human Services (HHS) regularly refines its policies and operational guidelines in an ongoing effort to better serve patients and support sustainable value-based care delivery. To that end, HHS and CMS recently announced three important updates: Revisions to HHS risk adjustment model algorithm software Changes to cost-sharing reductions (CSRs) Deployment of EDGE 38.0 These refinements are intended to improve access to affordable care and enhance the efficiency and accuracy of risk adjustment & risk adjustment reporting in ACA programs. In this article, we’ll take a closer look at the most relevant pieces of these three major updates.

Update 1: Changes to Cost-Sharing Reductions (CSRs)

The ACA’s premium tax credits have been discussed at length; as of early 2023, more than nine out of ten marketplace enrollees qualified for premium subsidies. But there is another ACA-related health insurance subsidy that is not as widely discussed: cost-sharing reductions, or CSRs. While premium subsidies help pay for the cost of health insurance itself, CSRs are intended to make healthcare more affordable for low-income individuals and families by lowering out-of-pocket costs like deductibles, copayments, and coinsurance. In order to take advantage of these savings, enrollees must select a plan in the Silver category. As of early 2023, nearly half of exchange enrollees (48%) have received CSR benefits.

Key Updates to CSRs

Plan Type Income Level Out-of-Pocket (OOP) Limit
CSR Silver Plan 94% Actuarial Value (AV) 100–150% of the federal poverty level (FPL) $3,150 (individual) $6,300 (family)
CSR Silver Plan 87% AV 151–200% FPL $3,150 (individual) $6,300 (family)
CSR Silver Plan 73% AV 201–250% FPL $7,550 (individual) $15,100 (family)
All Qualified Health Plans All income levels $9,450 (individual) $18,900 (family)
  In an effort to further reduce healthcare costs for low-income individuals and households, HHS has established new limits on out-of-pocket (OOP) spending for CSR-eligible enrollees in Silver plans. These limits are based on individual or household income and are as follows: The maximum OOP limit for all Qualified Health Plans (QHPs) in 2024 is $9,450 for an individual and $18,900 for a family, but CSR-eligible plans can have lower limits. It is also important to note that the OOP limit does not include the cost of monthly premiums. These changes will help improve millions of lower-income Americans access more comprehensive health care. To learn more about how CSRs affect the actuarial value of eligible plans and OOP maximums, get in touch with the Edifecs team today.

Update 2: Revisions to HHS Risk Adjustment Model Algorithm

The updates to the HHS Risk Adjustment Model Algorithm “Do-It-Yourself" (DIY) software are meant to strengthen risk assessment models with new medical knowledge and advancements in clinical practice. These updates help CMS effectively adapt to changes in care delivery by ensuring that risk adjustment methodologies remain relevant and effective in assessing health risks across diverse populations. Starting in benefit year (BY) 2023, there are a number of updates to the DIY risk adjustment model algorithm software. These updates should help health plans more accurately identify relevant health risks for their members. Expanded Cost-Sharing Reduction (CSR) Variants Additional CSR variants have been added and existing ones renamed for better alignment with 2023 requirements including the use of the enrollment duration (ED) variable for HCC-contingent ED factors in the adult models. This update ensures that the software accurately reflects the evolving landscape of cost-sharing reduction strategies. Updated ICD-10 to Condition Categories (CC) Crosswalk The crosswalk connecting ICD-10 codes to HHS condition categories (CC) has been revised to include FY2023 ICD-10 diagnosis codes and updates for the 2023 benefit year (BY). This update helps ensure that risk adjustment calculations in BY2023 and onward are based on the most current and relevant medical data. In addition, new age restrictions have been introduced for certain condition categories. These restrictions will exclude age-specific codes from adult, child, or infant models where the patient does not meet the age criteria for greater accuracy in risk scoring methodologies. Integration of 2023 CPT/HCPCS Codes To align diagnostic filtering with current medical practices and procedures, the DIY algorithm software now includes updated CPT/HCPCS codes effective as of April 1, 2023. Enhanced Model Factors and Interactions To account for the unique risk factors of enrollees with specific health conditions, the updated HHS algorithm now incorporates new severe and transplant interaction variables. The updated algorithm also introduces new enrollment duration factors for enrollees with at least one Hierarchical Condition Category (HCC), which will enable more refined and targeted risk assessments. Updates to NDCs and HCPCS Codes The algorithm software has also been updated to include the final set of National Drug Codes (NDCs) and Healthcare Common Procedure Coding System (HCPCS) codes for 2023. This update reflects the latest additions and revisions in medical coding datasets. Simplified CSR Indicators and Labels Relevant tables and indicators have been streamlined to simplify the process of identifying CSR values within the software; this enhancement supports greater accuracy and, therefore, an improved user experience. FY2023 and FY2024 Updates The HHS algorithm now incorporates FY2023 and FY2024 ICD-10 diagnosis codes and Medicare Code Editor (MCE) age and sex conditions, further supporting comprehensive care and coverage for enrollees. Labeling Enhancements for Specific HCCs Specific HCC labels have been updated to more accurately reflect their content and relevance for CY2023 (FY2023/FY2024), aligning coding with current medical terminology and practices. These updates represent a significant step forward in HHS’ efforts to improve the accuracy and effectiveness of risk adjustment in healthcare. By integrating the latest medical data and refining interaction variables, the DIY software will continue to support complete and accurate health assessments for enrolled populations.

Update 3: EDGE 38.0 Deployment

Finally, CMS announced the upcoming release of EDGE 38.0, which is intended to increase operational efficiency and deliver more precise risk adjustment reporting. To better understand and address the unique healthcare needs of specific patient populations, EDGE 38.0 will include new report fields related to severe HCCs and transplant-related conditions. Including these details will result in more detailed and accurate Risk Adjustment Risk Score Summary (RARSS) and Risk Adjustment Risk Score Detail (RARSD) reports. EDGE 38.0 will deploy in two phases. Deployment to the validation zone will commence on July 26, 2024, and deployment to production and test zones will commence on September 20, 2024. This structured deployment approach will streamline integration and help ensure a smooth transition for users. These improvements reflect ongoing efforts to enhance the effectiveness and reliability of ACA-related operations by providing healthcare providers and administrators with more comprehensive data to drive informed decision-making and operational strategies. Here’s what you can expect from the deployment of EDGE 38.0. New Fields for RARSS and RARSD Reports For the RARSS report, two new fields will be introduced:
  1. NumberEnrolleesWithSevereHCC, representing the number of enrollees with severe HCCs.
  2. NumberEnrolleesWithTransplantHCC, representing the number of enrollees with transplant-related HCCs.
The RARSD report will also see the addition of two new fields:
  1. paymentHccIndForAdditiveHccExclusion, indicating whether an enrollee's HCC is excluded due to additive conditions that would affect payment.
  2. PaymentHccCountAfterAdditiveHccExclusion, a count of HCCs considered for payment after excluding additive conditions.
By providing more detailed insights into risk adjustment factors and payment considerations, these updates will be invaluable for healthcare providers and insurers participating in ACA programs. With these new fields, EDGE 38.0 aims to streamline reporting processes and ensure accuracy in risk scoring and payment calculations. New Documentation To complement the release of EDGE 38.0, updated documents will be available on CMS REGTAP by July 31, 2024. This documentation includes: RARI ICD Addenda: Updates to Section 2 with new fields integrated into RARSD and RARSS Reports. Data Dictionaries/Data Models: Revisions to incorporate the newly added fields. Outbound XSD/XML Files: Ensuring seamless integration with existing systems. The updates in the EDGE 38.0 deployment will support improved operational efficiency and enable healthcare providers to take advantage of enhanced reporting capabilities. How Edifecs Can Help More accurate, comprehensive data and reporting are undoubtedly valuable for providers and health plans. But the added depth provided by the latest CMS updates is only valuable if the data can be easily validated, cleansed, and shared by users. Edifecs Encounter Submissions utilizes the latest DIY algorithm to calculate member- and encounter-level risk scores to help issuers streamline and improve operational efficiency of claim and member submissions. By utilizing AI-enabled coding and analytics, our SaaS-based solution helps health plans and providers break down encounter silos and support more accurate risk-adjusted revenue. Want to learn more about how Edifecs can help support your encounter operations? Reach out and connect with one of our experts today.
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