The Centers for Medicare and Medicaid Services has proposed to limit how Medicare Advantage Organizations can use in-home wellness or risk assessment visits of their enrollees to affect the risk adjusted payments they receive.  The proposal could cause a reduction in the number of such visits and lower overall payments to Medicare Advantage Organizations.

The Centers for Medicare and Medicaid Services (CMS) recently proposed to limit Medicare Advantage Organizations’ (MAOs’) ability to use diagnoses obtained from home risk assessments for Medicare Advantage (MA) risk-adjusted payments.  This is among several significant proposals in the Advance Notice of Methodological Changes for Calendar Year (CY) 2015 for MA Capitation Rates, Part C and Part D Payment Policies and 2015 Call Letter (the Advance Notice), published on February 21.

The Advance Notice includes other significant provisions affecting the MA and Part D programs, including revised MA payment rates and changes to provider network policies.  Comments from MAOs and other interested parties must be submitted by March 7, 2014.  CMS is expected to issue its final notice on April 7, 2014.

The Proposal and Its Background

The proposal would require that diagnoses from a home visit be excluded from risk adjustment, unless a subsequent clinical encounter confirms such diagnoses.  CMS’ proposal would not affect risk assessments conducted outside the home.

Risk adjustment modifies the capitation payments that MAOs receive to reflect the health status of their enrollees, thereby eliminating incentives for MAOs to avoid enrolling less healthy beneficiaries.  CMS’ risk adjustment methodology identifies enrollees’ health status based on diagnoses for those enrollees.

The present proposal follows a similar one in the 2013 Advance Notice, which was not finalized.  In 2013, CMS initially proposed to eliminate diagnoses identified in all risk assessment visits.  However, in its final notice issued in April 2013, CMS did not implement any such requirement and stated it would further study the issue.

CMS subsequently required that, for all 2014 dates of service, MAOs’ risk-adjustment submissions must code whether the visit was in a clinical setting or in the home.  For home visits, MAOs are additionally required to identify whether the visit is an Annual Wellness Visit, as that term is used in traditional Medicare.  The current proposal would apply to diagnoses from visits performed in 2014, which CMS uses for purposes of CY 2015 payments.

CMS’ Reasons for the Proposed Change

CMS’ proposal expresses skepticism about the clinical value of in-home risk assessments.  Indeed, CMS states that “to the extent that commenters believe that home assessments improve care, and are not just efforts to increase the diagnoses collected,” CMS would like to receive specific and measurable ways to identify and use certain home risk assessment diagnoses.

CMS notes that in-home risk assessments “are typically conducted by healthcare professionals who are contracted by the vendor and are not part of the plan’s contracted provider network, i.e., are not the beneficiaries’ primary care providers” and do not include treatment.  CMS also states that there is “little evidence that beneficiaries’ primary care providers actually use the information collected in these assessments or that the care subsequently provided to beneficiaries is substantially changed or improved as a result of the assessments.”

CMS suggests that if in-home risk assessments are, in fact, used to guide treatment, then diagnoses should also be documented in a follow-up visit in a clinical setting.  The Advance Notice suggests that the proposal would ensure that in-home risk assessments “serve as an effective vehicle to improve follow-up care and treatment for beneficiaries.”

CMS also expresses concern that diagnoses from risk assessments performed in the home inflate risk scores, without a corresponding increase in MA plan financial liability, and contribute to differences in coding patterns between MA and Fee For Service Medicare.  Although the Advance Notice expresses skepticism about whether risk assessments have real clinical value, it does not expressly state that CMS believes diagnoses obtained through these visits are inaccurate.

Impact of the Proposal

Home risk assessments have been used in MA to enhance the management and coordination of members’ care and are an additional avenue by which members’ conditions are identified and documented in a medical record. 

CMS’ proposal to require a subsequent clinical encounter would limit the value of home risk assessment visits for risk-adjustment purposes, since the risk assessment visit by itself would be insufficient to support a diagnosis.  If there is no subsequent clinical encounter or the provider in the subsequent encounter fails to submit the diagnosis or properly record it in their medical records, the diagnosis and documentation from the home risk assessment visit could, apparently, not be used to establish the member’s condition.  The proposal does not define what qualifies as a “subsequent clinical encounter,” nor does it specify whether the subsequent clinical encounter must occur during the same data-collection period as the risk assessment.

The proposal could potentially increase MAOs’ exposure in Risk Adjustment Data Validation Audits, since documentation from risk assessment visits can presently be used to support diagnoses.  The proposal does not directly address whether medical record documentation from a home risk assessment visit could still be used in a Risk Adjustment Data Validation Audit, if medical record documentation from a subsequent visit in a clinical setting is deemed insufficient.


After allowing for a brief comment period, CMS will issue its final policy for CY 2015 in April 2014.  However, CY 2015 risk adjustment payments are based on diagnosis data from encounters during 2014, including encounters that occur before the final policy is issued in April.  The current proposal does not specify whether it would apply to data from risk assessment visits that occur before any changed policy is finalized or would be limited to risk assessment visits that occur after that date.


CMS’ proposal may have a significant impact on home risk assessment visits in MA.  MAOs should consider commenting on the proposal.  In addition, MAOs should consider what operational adjustments they may need to make with respect to risk assessments performed in 2014.