In 2022, Medicare made the bold move to eliminate its RAPS system in favor of its EDPS system. This transition began in 2015 and was finalized in 2022. The RAPS (Risk Adjusted Processing System) was the original system CMS used to receive the ICD-10 codes from an MAO (Medicare Advantage Organization) and is heading toward its conclusion. RAPS utilized simpler files that required less edits. EDPS (Encounter Data Processing System) was phased in beginning in 2015. EDPS uses ANSI 837 v5010 files exchanged in EDI transactions, giving CMS a more comprehensive source of data.

How the Timeline Works

Encounter dates for 2021, Payment Year 2022, on a final submission deadline of July 2023 are being submitted under the EDPS Medicare Advantage/CMS system. All prior encounter date submissions will still use both EDPS and RAPS.

A key rationale of this transition is the change in methodology to determine risk adjustment values. Prior to this transition RAF score values were determined using fee for service data and not on the actual cost of care for the risk adjusted populations they’re applied to under value-based care. CMS believes that the EDPS system will improve its accuracy and fairness in its payments to Medicare Advantage Organizations.

One of the key features of Medicare risk adjustment is that it is a prospective payment model. This means that Medicare payments to health plans are based on the expected health care needs of enrollees, rather than their actual utilization. This approach gives health plans an incentive to invest in preventive care and disease management programs that can improve enrollee health and control costs over the long term.

Risk adjustment also levels the playing field for health plans, since payments are based on expected needs rather than actual utilization. This helps to ensure that plans compete on the basis of quality and value, rather than by trying to attract healthier enrollees.

As mentioned, Medicare risk adjustment is considered a prospective payment model. The current year’s demographics and diagnoses predict the following year’s payments. While MAOs receive a per-member per-month (PMPM) capitation payment based on predicted risk scores, final payment from CMS based on actual risk scores could take up to two years. This means that the final payment for 2021 Dates of Service (DOS) will not occur until after the final submission of diagnosis codes in 2023. (See the charts below).

On May 18, 2022 CMS released a clarifying memo Deadline for Submitting Risk Adjustment Data. Included in the memo is the following schedule.

Risk Adjustment Timeline for 2022 Payments

Submission Deadlines (X)

Initial Run: September 3, 202 Midyear: March 4, 2022 Interim Final Run: January 31, 2023 Final Run: July 31, 2023

Key Timeline Terms

All terms below will be using the example of a 2022 Payment Year utilizing 2021 Dates of Services.

Initial Run

The Initial Run includes all data from the second half of the prior year (2020) and the first half of the DOS year (2021). The deadline to submit this data is September 2021. Payments utilizing the initial run are made in the first half of the Payment Year (2022) and will be subject to Retroactive Adjustments. After the Initial Run the data from 2020 will no longer be utilized for Payment Year 2022.

Midyear

The Midyear Run utilizes the Dates of Service from the year 2021. The submission deadline for this data is March 2022. There will be Retroactive Adjustments made to the Prospective Payments previously made (first half of the Payment Year – 2022). In addition, Prospective Payments are made in the second half of the Payment Year (July-Dec 2022). These payments will be subject to Retroactive Adjustments during the Final Payment.

Interim Final Run

For Payment Year 2022 the Interim Final Run is the first run that occurs 13 months after the DOS year (2021) is completed. As you can see in the chart above for Dates of Service in 2021 the Interim Final Run is on 1/31/23 (8PM ET). The Payments will be adjusted and calculated by June 2022. For the previous year (Payment Year 2021) an Interim Final Run was utilized with a submission deadline of January 2022.

Final Run

The Final Run utilizes the Dates of Service from the year 2021. For 2022, it was modified to July 31, 2023. CMS did a modification and extended the deadlines for the 2022 Payment Year.

So What Now?

The last date to submit data for Payment Year 2022/DOS 2021 is July 31, 2023. The payment for this Final Run has not been announced but will likely be in the second half of 2023. As you can see from the chart above the years and dates overlap each other. For Payment Year 2022, the first submission occurs in September 2021 and the first payment occurs in January 2022. The final data submission will occur on July 31, 2023 – almost two years following the first submission – and the Final Run payment will likely occur in the second half of 2023.

Get it Right the First Time

It is very important for health plans and their participating providers to get their submissions right the first time to minimize variability and to optimize their payments during the early submissions.

ForeSee Medical’s prospective decision support and retrospective review options ensure your Medicare risk adjustment coding is evidence-based and accurate. Improve your compliance, reduce work during sweep timeframes, and eliminate clerical bottlenecks by coding correctly at the point of care — because it always feels great to do something right the first time.