Future of Medicaid Risk Adjustment: CDPS + Rx Version 7.0 is Ready

Future of Medicaid Risk Adjustment: CDPS + Rx Version 7.0 is Ready

Washington, DC- The Institute for Medicaid Innovation (IMI) launched a collaborative project in 2020 with the University of California San Diego to update the Chronic Illness and Disability Payment (CDPS) risk adjustment weights, currently used by 22 state Medicaid programs.

We are delighted to announce the release of CDPS+Rx version 7.0, representing a major revision of the CDPS model using ICD-10 native data from national Medicaid managed care organizations from 2017-2019. Furthermore, phase III of the project has begun with the goal of conducting an exploratory analysis to determine if weights can be established for social determinants of health (SDOH). There is no guarantee that a final model will result in the inclusion of SDOH weights but we are exploring the possibility to be responsive to the interest of state Medicaid agencies.

The originally developed CDPS model used fee-for-service data from calendar years 2000 and 2001 with an update of the weights in 2011. As a result, neither the experience of managed care over the past 10 years nor the changes in the Medicaid program broadly (e.g., Medicaid expansion, expansion of managed care statewide, introduction of more complex populations into managed care, etc.) have been accounted for in the CDPS weights. Updating the weights through this project has the potential to assist states in more accurately implementing risk adjustment methodologies.

Risk adjustment is the use of claims and encounter data to adjust capitation payments (set amount per member per month) for Medicaid health plans based on their members’ health and projected costs of care. Risk adjustment models help ensure that health plans can provide affordable, accessible, and quality care. Moreover, risk adjustment encourages efficiency in care delivery, adequate financing of healthcare, and spurs innovation. Accurate data and rigorous data collection and analysis is critical to developing and maintaining risk adjustment models that promote effective care delivery.

We expect two main improvements in the CDPS model: 1) to the extent that new treatments and technology have changed how patients are treated, the relative weights estimated with 2011 data may not accurately reflect relative cost in 2019, and 2) to the extent that patients are treated differently in fee-for-service (FFS) vs. managed care, the regression weights estimated with FFS data may not to reflect patterns of care in managed care organizations. Participating Medicaid managed care plans are large national organizations with Medicaid contracts in a broad cross-section of states.

Current licensees of the CDPS model can request a zip file containing codes for CDPS, CDPS+Rx, and MRX along with their corresponding weights, an FAQ, and a summary of the CDPS update. Instructions for running CDPS are in the headers of the cdps01.sas and mrx01.sas files. Further information on obtaining the new weights, can be found at the University of California San Diego website: https://hwsph.ucsd.edu/research/programs-groups/cdps.html

About the Institute for Medicaid Innovation

The Institute for Medicaid Innovation (IMI) is a 501(c)3 nonprofit, nonpartisan research and policy organization that provides independent, nonpartisan information and analysis to inform Medicaid policy and improve the health of the nation.