- The Centers for Medicare & Medicaid Services (CMS) seem to have taken insurers' word on their 2014 enrollee risk scores--but not anymore.
- Risk score credibility is an issue as the PPACA risk adjustment program has provided insurers with incentive to interpret enrollees' health information to make them look as sick as possible.
- To keep scores in check, CMS is creating the HHS-operated Risk Adjustment Data Validation (HHS-RADV) program. Training for insurers on the program has already begun.
The PPACA HHS-RADV system will, in a sense, pit commercial health insurers against one another, notes LifeHealthPro, because all funding to insurers comes from other insurers. It creates an environment in which insurers will be incentivized to claim as much risk as possible while questioning the risk claimed by others, or exit the individual and small-group market if they believe they wouldn't compare favorably.
To keep insurers in check, CMS will want insurers to get their own initial validation audit (IVA) of their risk score data, and then CMS will handle a partial second validation audit (SVA) of the data previously reviewed.
CMS plans to incorporate audit results in determining risk adjustment program payments beginning with the 2016 benefit year.