CMS Pub. 100-16, ch. 7, § 120.3.3

CMS provides a SAS software program for each of the CMS-HCC risk adjustment

models that allows organizations to verify and predict risk scores. Users must have a

SAS license to use the SAS program.

MA organizations may access the risk adjustment Risk Model software at:

http://www.cms.gov/MedicareAdvtgSpecRateStats/06_Risk_adjustment.asp#TopOfPage.

The software includes an HCCSOFT SAS program that uses several SAS Macros to

create HCC, RxHCC, and ESRD HCC risk score variables using coefficients from the

following regression models:

• Community

• Institutional

Beneficiaries Charles W.

Wood and Lillian L. Tree,

listed on this sample MOR

did not trigger HCCs since

the previous model run.

However, CMS accounts

for the beneficiaries’ age

and sex in the total risk

score reported on the MMR.

Three HCCs triggered for this

fi i

One interactive HCC triggered for this

b fi i Beneficiary Albert A. Grass, has triggered three HCCs and one interaction. CMS will reflect

the rate for these HCCs in the beneficiary’s risk score, communicated on the MMR.

• New enrollee

The HCCSOFT software supplies user parameters to the main SAS Macro program

MACROSFT. This macro program takes user-provided files and assigns HCCs or

RxHCCs for each beneficiary. The program follows five major steps when calculating

risk scores:

1. Assigns each beneficiary to an appropriate age/sex grouping, and adds in the

interactions for Medicaid, disabled, and previously disabled

2. Crosswalks diagnoses to Condition Categories using SAS formats that were

previously stored in the FORMAT library

3. Creates HCCs by imposing hierarchies on the Condition Categories

4. Creates the interactions

5. Computes three scores for each beneficiary: community, institutional, and new

enrollee

Note: For beneficiaries without relevant diagnoses from RAPS or FFS claims data, zeros

are assigned to all HCCs and RxHCCs.

130 - Glossary of Terms

(Rev. 118; Effective: ICD-10: Upon Implementation of ICD-10, ASC X12: January 1, 2012 (for ASC X12 5010); Implementation: ICD-10: Upon Implementation of ICD-10,

ASC X12: January 1, 2012 (for ASC X12 5010))

Beneficiary Demographic Input File - Contains beneficiary demographic data captured

from Common Medicare Environment. The demographic data is used by the Risk

Adjustment System (RAS) to calculate a beneficiary’s risk score and to determine

payment.

Beneficiary Diagnosis Input File - Contains beneficiary diagnosis data captured from

Risk Adjustment Processing System (RAPS) and National Medicare Utilization Database

(NMUD). The diagnosis data is used by the Risk Adjustment System to calculate a

beneficiary’s risk score and to determine payment.

Common Medicare Environment (CME) – Tables sourced from the Medicare

Beneficiary Database (MBD) and the Enrollment Database (EDB) that provide

beneficiary demographic and enrollment data.

Connect: Direct - A type of electronic connection between MA organizations and CMS

used to submit risk adjustment data and receive information. This connection involves

mainframe-to-mainframe connection with a submission response from FERAS.

Data Collection Period - The 12 month period from which CMS uses diagnoses

submitted by MA organizations to calculate a beneficiary’s risk score.

Data Submission - The process in which MA organizations submit required data

elements to CMS for risk adjustment purposes.

Data Validation - The process of validating that enrollee diagnosis codes submitted for

payment by MA organizations are supported by the medical record documentation.

Diagnosis Cluster - Core information submitted by MA organizations for each diagnoses

submitted. The following are included: provider type, from date of service, through date

of service, delete indicator, and diagnosis code.

Dialysis Status - CMS risk adjusts payments for a beneficiary using the CMS-HCC

dialysis model when we are notified that the beneficiary is receiving dialysis.

Direct Data Entry (DDE) - An electronic data exchange between providers and health

plans where health plans enter RAPS data directly into an online screen for processing.

Disabled Status - Demographic factor for beneficiaries who became eligible for

Medicare based on a disability.

Disease Hierarchy - International Classification of Diseases Clinical Modification

(ICD-9-CM or ICD-10 CM as applicable) diagnosis codes that address multiple levels of

severity for a disease with varying levels of associated medical costs.

Dual Eligible - An MA eligible individual who is also entitled to Medical Assistance

under a State Plan under Title XIX (Medicaid). A chart describing the various categories

of individuals who are collectively known as dual-eligibles can be found at:

https://www.cms.gov/MedicareEnRpts/Downloads/Buy-InDefinitions.pdf.

Electronic Data Interchange (EDI) Agreement - An agreement MA organizations have

with CMS to follow provisions for submitting risk adjustment data through one of CMS’

accepted types of electronic connections.

End Stage Renal Disease (ESRD) - Permanent kidney failure requiring dialysis or a

kidney transplant.

Enrollment Database (EDB) – A data repository that contains Medicare entitlement

information for beneficiaries entitled to Medicare.

File Transfer Protocol (FTP) - A type of electronic connection between MA

organizations and CMS used to submit risk adjustment data and receive information. The

connection uses modem-to-modem (i.e., dial up) or lease line connection with a

submission response from FERAS.

Frailty Adjuster - Predicts Medicare expenditures of community populations with

functional impairments that are unexplained by the risk adjustment methodology alone.

The frailty adjuster is included as part of risk adjusted payments for PACE organizations

and, through 2011, for certain demonstration organizations. Beginning in 2012, certain

Fully Integrated Dual Eligible Special Needs Plans (FIDE SNPs) are eligible to receive

frailty adjustment.

Front End Risk Adjustment (FERAS) - Performs the initial file editing for risk

adjustment data submitted by Medicare Advantage and Medicare Advantage-Prescription

Drug plans and transmits files to the Risk Adjustment Processing System (RAPS).

Full Risk - Medicare beneficiaries that have 12 months of Part B coverage during the

data collection period.

Gentran - A type of electronic connection between MA organizations and CMS used to

submit risk adjustment data and receive information. Gentran users are issued a mailbox

and it is used as a vehicle to transmit and receive reports on RAPS data sent to CMS.

Health Plan Management System (HPMS) - CMS information system used by

Medicare Advantage and Prescription Drug plans to upload bid, Plan Benefit Package,

and marketing information, and is used by CMS to send information to plans.

Hierarchical Condition Category (HCC) - Groupings of clinically similar diagnoses in

each risk adjustment model. Conditions are categorized hierarchically and the highest

severity takes precedence over other conditions in a hierarchy. Each HCC is assigned a

relative factor which is used to produce risk scores for Medicare beneficiaries, based on

the data submitted in the data collection period.

Health Insurance Portability and Accountability Act (HIPAA) - Health Insurance

Portability and Accountability Act of 1996 (HIPAA, Title II) required the Department of

Health and Human Services to establish national standards for electronic health care

transactions and national identifiers for providers, health plans, and employers. It also

addressed the security and privacy of health data and contained health insurance reforms

intended to promote access and portability of insurance coverage. The implementation of

HIPPA improved the use of electronic data exchange in the national health care system.

International Classification of Diseases-9th Edition-Clinical Modification (ICD-9-

CM) Codes - 3 to 5-digit codes used to describe the clinical reason for a patient’s

treatment. The codes do not describe the service performed, just the patient’s medical

condition. Diagnosis codes drive the risk scores, which drive the risk adjusted

reimbursement from CMS to MA organizations. ICD-9-CM codes are used for inpatient

discharges before the implementation date of ICD-10, and for outpatient and physician

services before that date.

International Classification of Diseases-10th Edition-Clinical Modification (ICD-10-

CM) Codes - 3- to 7-digit codes used to describe the clinical reason for a patient’s

treatment. The codes do not describe the service performed, just the patient’s medical

condition. Diagnosis codes drive the risk scores, which drive the risk adjusted

reimbursement from CMS to MA organizations. ICD-10-CM codes are used for inpatient

discharges on and after the implementation date of ICD-10, and for outpatient and

physician services on and after that date.

Long-term Institutionalized (LTI) Status - CMS identifies whether a Medicare

beneficiary is in a long term institution for both model development and risk score

calculation purposes. CMS considers a beneficiary as having long term institutional

status if they have been in an institution for 90 days or more. CMS obtains this

information from the Minimum Data Set (MDS), which stores dates of 90-day

assessments reported by nursing homes.

Low-income Subsidy (LIS) - Provides financial assistance for beneficiaries who have

limited income and resources; individuals eligible for this low-income subsidy will

receive assistance with paying for their monthly premium, yearly deductible, prescription

coinsurance and copayments and coverage in the gap.

Medicaid - Title XIX of the Social Security Act is a Federal/State entitlement program

that pays for medical assistance for certain individuals and families with low incomes and

resources.

Medicare Advantage Prescription Drug (MARx) System - Receives beneficiary level

risk adjustment factors from RAS for use in Part C and Part D payment calculations.

Medicare Beneficiary Database (MBD) – A data repository that contains eligibility and

enrollment data for Medicare beneficiaries.

Minimum Data Set (MDS) - A part of the Resident Assessment Instrument (RAI)

developed by CMS to assist Medicare/Medicaid certified nursing homes in developing a

comprehensive care plan for each resident.

Minimum Data Set (MDS) Long Term Institutional File - Identifies beneficiaries that

resided in a long term institution for 90 days or more, which classifies them as long term

institutional (LTI) beneficiaries. The file is used to identify Medicare beneficiaries that

reside in LTI for risk adjustment purposes.

National Medicare Utilization Database (NMUD) - Contains Medicare claims data,

including diagnostic data submitted by fee-for-service providers for beneficiaries new to

Medicare Advantage with less than 12 months of risk adjustment data. The diagnostic

data stored in NMUD is translated to the risk adjustment format.

National Provider Identifier (NPI) - The NPI is a 10-digit, intelligence free numeric

identifier (10 digit number). Intelligence free means that the numbers do not carry

information about health care providers, such as the state in which they practice or their

provider type or specialization.

New Enrollee - A Medicare beneficiary who has less than 12 months of Part B

entitlement during the data collection period.

Normalization Factor - Factor used to correct population and coding changes between

the data years used in model calibration and the payment year.

Original Reason for Entitlement Code (OREC) - A demographic factor added to the

risk score for beneficiaries 65 years of age or older who were originally entitled to

Medicare due to disability. The factor varies based on the age and sex of the beneficiary.

Post-Graft (Functioning Graft) - A beneficiary is in post-graft status when they have

received a kidney transplant or kidney/pancreas transplant at least three months ago and

did not return to dialysis status since the transplant. There is a separate segment of the

CMS-HCC ESRD model for people who have functioning kidney grafts.

Principal Inpatient Diagnostic Cost Group (PIP-DCG) - The PIP-DCG model was a

precursor to the CMS-HCC risk adjustment model CMS used the PIP-DCG model from

2000-2003. In this model, CMS used diagnoses from hospitalizations to identify a

particularly ill and high cost subset of beneficiaries for whom CMS will make higher

payments in the next year. The system recognized admissions for which inpatient care is

most frequently appropriate and which are predictive of higher future costs.

Program of All-Inclusive Care for the Elderly (PACE) - A unique capitated managed

care benefit for frail and elderly individuals provided by a public entity or private entity.

PACE features a comprehensive medical and social service delivery system using an

interdisciplinary team approach in an adult day health center that is supplemented by in-home and referral services in accordance with participants' needs.

Reconciliation - The CMS process of updating beneficiaries’ statuses and processing the

resulting payment adjustments.

Risk Adjustment Processing System (RAPS) – An application that stores diagnoses

data submitted by MA Organizations. Upon completion of the initial file processing,

FERAS sends the risk adjustment data to RAPS to perform low level edits to the file

header and record.

Risk Adjustment System (RAS) – A system used to calculate a beneficiary’s risk score

from enrollment and diagnosis data received from Common Medicare Environment

(CME), National Medicare Utilization Database (NMUD) system and Risk Adjustment

Processing System (RAPS). After the risk scores are calculated in RAS, they are sent to

MARx to use in calculating beneficiary level prospective payments.

Special Needs Plan (SNP) - An MA coordinated plan that limits enrollment to special

needs individuals, i.e., those who are dual-eligible, institutionalized, or have one or more

severe or disabling chronic conditions, as set forth at 42 CFR 422.4(a)(1)(iv) of the MA

regulation, and provides Part D benefits under 42 CFR Part 423.

Taxonomy Code - An external non-medical data code set designed for use in classifying

health care providers according to provider type or practitioner specialty in an electronic

environment, specifically within the American National Standards Institute, Accredited

Standards Committee health care transaction.

Transplant Status - A Medicare beneficiary is in Transplant Status for the three months

commencing with a kidney transplant.