CMS Pub. 100-16, ch. mc86c16b, § 20.2.5.1

Section 1853(a)(1)(B)(iv) of the Act gives the Secretary the authority to apply a frailty adjustment

payment under the rules for Program of All-Inclusive Care for the Elderly (PACE) payment, for

certain FIDE SNPs, to reflect the costs of treating high concentrations of frail individuals. CMS

announces its methodology for determining whether a FIDE SNP “has a similar average level of

frailty…as the PACE program” in the annual Announcement of Calendar Year (CY) Medicare

Advantage (MA) Capitation Rates and Part C and Part D Payment Policies located at:

https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Announcements-and-

Documents.html. Policy changes and changes in the assumptions and methodologies for MA

payment and the calculation of the frailty adjustment are discussed each year in the Advance

Notice of Methodological Changes for Calendar Year (CY) for Medicare Advantage (MA)

Capitation Rates and Part C and Part D Payment Policies, which is issued at least 60 days before

the first Monday in April of the year preceding the calendar year for which the rates and frailty

adjustment are applicable. Each year, we also notify each FIDE SNP of its frailty score and of

how it compares to PACE organizations.

CMS calculates frailty scores at the PBP level using the limitation on activities of daily living

(ADL) reported by a plan’s enrollees, based on the Medicare Health Outcomes Survey (HOS) or

Health Outcomes Survey-Modified (HOS-M) from the year previous to the payment year. For

example, for payment year 2024, CMS will use the 2023 HOS or HOS-M to determine a frailty

score for FIDE SNPs. MA organizations that believe they will be sponsoring a FIDE SNP in 2024

and want to be considered for a frailty payment must participate in the 2023 HOS or HOS-M to

allow for CMS to calculate their frailty score. For more information, please see the annual HPMS

memo, “Participation in HOS/HOS-M for MA Organizations Planning to Sponsor FIDE SNPs.”

Therefore, in order for a SNP to be eligible to receive frailty payments pursuant to section 1853 of

the Act, the SNP must: (1) satisfy the FIDE SNP definition under 42 CFR 422.2; (2) participate in

the HOS/HOS-M; and (3) have similar average levels of frailty as PACE organizations as

described in the Advance Notice for the given year.