Risk adjustment

(a) Rulemaking As part of the annual rulemaking cycle for Medicare Advantage for payments applicable to 2028 and subsequent years, the Secretary of Health and Human Services, in consultation with the Inspector General of the Department of Health and Human Services— (1) shall include an analysis identifying diagnosis codes with a high rate of differential coding between equivalent enrollees in Medicare Advantage and Medicare beneficiaries not enrolled under a Medicare Advantage plan, a high rate of discretionary coding, or limited treatment implications; and (2) shall exclude or adjust diagnosis codes that the Secretary determines are most likely to be subject to coding variation by Medicare Advantage plans from diagnosis data submitted to the Secretary for purposes of determining appropriate payment adjustments for health status. (b) Exclusion of diagnoses collected from chart reviews and health risk assessments (1) Medicare advantage plans Section 1853(a)(1)(C) of such Act (42 U.S.C. 1395w–23(a)(1)(C)) is amended by adding at the end the following new clause: (iv) Exclusion of diagnoses collected from chart reviews and health risk assessments (I) In general For 2028 and each subsequent year, for purposes of establishing the payment adjustment factors and adjusting payment based on health status under clause (i), the Secretary shall not take into account a diagnosis collected from a chart review or a health risk assessment. (II) Identification of diagnoses collected from chart reviews and health risk assessments The Secretary shall establish procedures to provide for the identification and verification of diagnoses collected from chart reviews and health risk assessments.. (2) Prescription drug plans Section 1860D–15(c)(1) of the Social Security Act (42 U.S.C. 1395w–115(c)(1)) is amended by adding at the end the following new subparagraph: (E) Exclusion of diagnoses collected from chart reviews and health risk assessments (i) In general For 2028 and each subsequent year, for purposes of establishing the methodology and adjusting the standardized bid amount based on health status under subparagraph (A), the Secretary shall not take into account a diagnosis collected from a chart review or a health risk assessment. (ii) Identification of diagnoses collected from chart reviews and health risk assessments The Secretary shall establish procedures to provide for the identification and verification of diagnoses collected from chart reviews and health risk assessments.. (c) Medpac study and report (1) Study The Medicare Payment Advisory Commission shall conduct a study to determine how results from a Consumer Assessment of Healthcare Providers and Systems (CAPHS)-sized survey could be extrapolated across all enrollees under a Medicare Advantage contract for the purposes of calculating risk adjusted payments. Such study shall include recommendations on methodology, modifications to the CAPHS survey questions, and CAHPS survey sample size. (2) Report Not later than 3 years after the date of enactment of this Act, the Medicare Payment Advisory Commission shall submit to Congress a report on the study conducted under paragraph (1), together with recommendations for such legislation and administrative action as the Commission determines appropriate.