April 22, 2016
Kevin Counihan, Chief Executive Officer
Center for Consumer Information and Insurance Oversight
Centers for Medicare & Medicaid Services
Department of Health & Human Services
Submitted electronically via: firstname.lastname@example.org
Dear Mr. Counihan:
The Association for Community Affiliated Plans (ACAP) thanks CCIIO for the significant amount of time and effort that clearly went into developing the HHS-Operated Risk Adjustment Methodology Discussion Paper (white paper). We are particularly grateful for the recognition of the impact of potential changes on smaller and quickly-growing health plans. In addition, we appreciate CCIIO’s ongoing willingness to engage stakeholders in a discussion on the topic of the risk adjustment model prior to moving towards proposals in future rulemaking.
ACAP is an association of 56 not-for-profit, community-based Safety Net Health Plans (SNHPs) located in 26 states. Our member plans provide coverage to approximately 15 million individuals enrolled in Medicaid, the Children’s Health Insurance Program (CHIP) and Medicare Special Needs Plans for dually-eligible individuals. Nationally, ACAP plans serve roughly one-half of all Medicaid managed care enrollees. Seventeen of ACAP’s SNHP members have elected to offer QHPs in the Marketplaces in 2016 and an additional four are planning to enter in 2017.
Risk adjustment, at its best, levels the playing field for those plans that serve higher cost members, as SNHPs have traditionally done (given their origin as Medicaid plans serving lowincome and vulnerable populations). With this aim in mind, ACAP supports changes to the risk adjustment model that improve its accuracy. But incremental increases in accuracy must be weighed against the propensity for perverse incentives that may lead to gaming as well as the need for model simplicity and rate stability—which are important in maintaining a robust, competitive Marketplace attuned to serving individuals of all income ranges.
Changes to the risk adjustment methodology that overcomplicate the model or lead to perverse incentives cause issuers to spend resources, both time and financial, in ways that are solely aimed at understanding the model and increasing risk adjustment scores. When incentives are structured in such a way that rewards playing the “game” well, rather than serving high-need members better, smaller community-based plans disproportionately lose. Safety Net Health Plans prioritize investing their resources into better serving their members, not specifically on finding ways to just improve their risk scores. Changes to the risk adjustment model should not discourage this mission; ACAP’s comments on the white paper are written with these principles in mind.