CMS Pub. 100-16, ch. 7, § 70.2.4

In CMS’ calculation of the MA payment, CMS includes an additional factor in the risk

score based on the original reason the beneficiary became eligible for Medicare. Table 5

outlines the application of the factor based on original reason for entitlement. The

Monthly Membership Report reflects the OREC identified in MARx.

Table 5. Original Reason for Entitlement Codes and Descriptions

OREC Description Factor Application

0 Beneficiary insured due to age CMS applies no additional factor.

1 Beneficiary insured due to disability CMS applies the same factor for OREC 1 and

3.

2 Beneficiary insured due to ESRD CMS applies no additional factor under the

CMS-HCC model.

3 Beneficiary insured due to disability

and current ESRD

CMS applies the same factor for OREC 1 and

3.

Example (example uses the CMS-HCC risk adjustment model used in payment for

years 2009 through 2011):

• An 83 year old man who originally became entitled to Medicare as disabled is

diagnosed with pneumococcal pneumonia (ICD-9 code 481, HCC112).

• Originally insured due to disability, OREC = 1

• Originally disabled, male = 0.168

Pneumococcal Pneumonia, Emphysema, Lung Abscess, HCC112 = 0.249

• Risk Score = (demographics) + 0.168+0.249

Example (example uses the CMS-HCC ESRD dialysis risk adjustment model used

in payment for years 2008 through 2011):

• A 72 year old man who became had originally been entitled to Medicare as

disabled is diagnosed with End-Stage Renal Disease (ESRD) with renal dialysis

status (ICD-9 code V451, HCC130).

• Originally insured due to disability with current ESRD, OREC = 3

• Male, originally entitled due to disability (non-ESRD) = 0.032

Renal Dialysis Status, V451, HCC130 = 0.0000

• Risk Score = (demographics) + 0.032+0.000