Responding to complaints from health plans questioning the accuracy of the CMS template for predicting costs, the agency has disclosed that it has been underpaying health plans that enroll many people  dually eligible for Medicare and Medicaid. CMS says it will modify its  risk-adjustment model to make up for the underpayment.

The CMS has been using a  model (called the CMS-HCC) to calculate risk scores, using health status in a base year to predict costs in the next one. Modern Healthcare reports that “scores drive adjustments to capitated payments made for elderly and disabled beneficiaries enrolled in Medicare Advantage (MA) plans and certain demonstration programs. ”