Interactions between the CIF and the +/- 3% risk score floor and ceiling in ACO REACH

The Coding Intensity Factor (CIF) is intended to establish revenue neutrality in the Realizing Equity, Access, and Community Health (REACH) program and causes all accountable care organizations (ACOs) to pay for increases in program-wide risk scores. Because the CIF is calculated after the application of the +/-3% floor and ceiling, some REACH ACOs could contribute materially to the CIF while also having their final risk scores increased by the -3% risk score floor.

What is the CIF?

For each of the two beneficiary categories—aged and disabled (AD) and end-stage renal disease (ESRD)—the REACH program employs a three-step process to determine the payment risk score (i.e., the risk score that will be used to adjust the final benchmark): normalization, a +/- 3% risk score floor and ceiling, and the Coding Intensity Factor (CIF).

• The normalization factor is meant to control for the general coding level of the entire ACO REACH national reference population, by ensuring the average normalized risk score of the reference population is 1.0 in each performance year. Between 2020 and 2023, the annualized growth rate of the Centers for Medicare and Medicaid Services (CMS) hierarchical condition category (HCC) V24 risk score normalization factor is 0.9% and 1.1%, for the AD and ESRD populations respectively.
• The +/- 3% risk score floor and ceiling are meant to limit the impact of and reduce incentives for coding intensity by each ACO by ensuring that the normalized risk score of the ACO in the performance year (PY) deviates by no more than 3% in either direction from that of the reference year (which is 2021 for PY2023, and 2022 for PY2024-PY2026). Starting from PY2024, the floor and ceiling will be applied after allowing for changes in demographics of the ACO’s aligned population.
• Finally, the CIF is a retrospective adjustment meant to control for the observed coding level of the aligned population in REACH, by ensuring model-wide zero-sum: i.e., that the normalized and capped risk score across all aligned beneficiaries in REACH ACOs in the PY is equal to the normalized risk score for the simulated attributed populations of the most recent base year, i.e., base year (BY) 3, 2019. For each beneficiary category, the CIF is applied uniformly to the claims-aligned and continuously voluntarily aligned population¹ of all ACOs.

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