In it for the long haul: Best practices for navigating annual EDGE server submissions

The summer driving season is well into the rearview mirror, and the Affordable Care Act (ACA) External Data Gathering Environment (EDGE) server cycle is in full swing.^1,2 Clearly, the time spent planning, coordinating, and carrying out your annual road trip is much more enjoyable, but neglecting these same critical activities with your data submissions can have far-reaching consequences for your organization.

Some seasoned travelers swear by a spontaneous itinerary, touting the freedom, flexibility, and excitement that comes with trekking into the unknown. When it comes to the EDGE server, this approach can be disastrous. Missing information, EDGE errors, and certain misspecifications will affect your risk adjustment transfers—either now or in a future audit by the Centers for Medicare and Medicaid Services (CMS). In the ACA market, these issues may create a double whammy of less favorable results for you and more favorable results for your competitors. In this short piece, we share best practices for a few key EDGE features to help keep your process on the right course and get the most out of your annual submission.

Preparing for the road ahead

A successful cycle starts with a dedicated owner—someone who is engaged throughout the entire process and is responsible for thoughtful and thorough planning well in advance of the first submission deadline. CMS regularly provides information and updates via live webinars and the Registration for Technical Assistance Portal (REGTAP) website. The rules and regulations evolve over time, and your EDGE helmsman should map the entire route, with all major milestones and rest stops along the way. Priority should be placed on coordinating stakeholders and ensuring that key resources understand the timing of each leg. The graphic in Figure 1 lays out how a typical benefit year (BY) EDGE cycle might look.

The timeline spans quite a few months and leaves little downtime for assessing prior year improvement opportunities and laying the foundation for the next cycle. Planning ahead is critical to avoid multiple workstreams once the EDGE season begins and resources get tight. And starting early is even more important if you’re expecting a major process change (such as switching submission vendors or migrating to a new claim processing system).

Ideally, you’d stick to the itinerary as best you can, but even the most well-intentioned plan can get derailed by unexpected hazards. Some of these can be mitigated, if not avoided altogether. In the next section, we explore a few items you’ll encounter along the way and discuss strategies to help you stay engaged and react to changing conditions.

You're in the driver's seat

Below, we organize all sections in a similar structure to highlight why the concept is important and what issuers should know when navigating each.

Plan data

Why it’s important: The server houses reference data that validates information on EDGE at various points in time. One important example is the Plan Data Table (PDT), which identifies benefit plan eligibility—defined by a Health Insurance and Oversight System (HIOS) plan ID—in a rating region within a specified timeframe. An incomplete PDT lowers the acceptance of valid members and their associated claims.

What you should know:

• CMS has a process to populate certain benefit plans in the PDT each year. Most issuers, though, will need to supplement the CMS data, particularly in the following instances:
  • Individual off-exchange-only plans
  • Small group nonterminating off-exchange plans
  • Inconsistencies or errors in data provided to CMS (such as when a plan does not meet uniform modification requirements in the annual rate filing)
  • Certain state-specific plan coverage rules
• Missing PDT entries must be manually added through one of two mechanisms:
  • Rate and Benefits Information System (RBIS)³
    • CMS documentation describes RBIS as an annual data collection process with quarterly windows. The windows for a given BY begin during the prior EDGE cycle, which can make it easy to overlook when you’re in the throes of submissions for a different BY.
    • Insurers should incorporate RBIS into a recurring process to the extent possible.
  • If you miss the RBIS period, you’ll have to correct the information during the submission cycle (in addition to your normal responsibilities) through a supplemental PDT submission.⁴ This does involve a longer review process (including by your state’s insurance department) and has the potential of inconveniently diverting your EDGE resources.
• Regardless of how you choose to populate plan data, be sure to coordinate with your product team to account for all plans and regions with eligible enrollment.

Error resolution

Why it’s important: The integrity of risk adjustment relies on the completeness and accuracy of issuer data, which is why EDGE rejects information failing certain checks.

• One such check is a comparison of issuer data with EDGE reference material, as described above in the Plan Data section. A series of additional, complex, and thorough EDGE Server Business Rules (ESBRs) also work to identify data issues.
• Some rejections are legitimate and cannot be addressed, while others are candidates for correction.
• For data not making its way onto the server, any risk adjustment value from that information will be lost, and the revenue impact can be significant depending on the nature and extent of the errors.

What you should know:

• Early in the submission process, pervasive issues can be addressed through stock EDGE error reporting. A good target for completing this step is before the second CMS submission in December.
• After correcting as many systematic opportunities as possible, issuers should shift focus to the less common problems, which typically require more effort and time to investigate.
• Claim acceptance by EDGE does not guarantee risk adjustment eligibility. Specific inconsistencies in the data can invalidate a claim, which may not appear in standard CMS error reporting.
• Not every error will directly affect revenue or risk adjustment data validation (RADV) audit results. Prioritizing errors can improve data accuracy in an efficient manner. However, it requires robust error tracking and identification, as well as deep knowledge of the risk adjustment program, RADV, and EDGE reporting.
• Enrollment and premium errors can be just as important as diagnosis issues. If any error materially alters market-wide risk transfers, you may be financially liable for the adversely affected issuers.
• When resolving errors, stay on top of documentation, particularly for data transformations between the source systems and EDGE. Waiting until the RADV Initial Validation Audit (IVA) could lead to a scramble during the audit when EDGE and IT resources have been reallocated elsewhere.
• Even if you view your submission efforts as best-in-class, an occasional audit by an independent third party can be a useful tool in validating the efficacy of the process.

Baselines/outlier metrics

Why it’s important: CMS regularly assesses EDGE data from the first to the last submission,⁵ and issuers failing any CMS check will receive a notification requiring action.

• Quantity metrics measure the EDGE data amounts relative to “baseline” enrollment and claim amounts that are reported through a separate form.
• Quality metrics measure the EDGE data consistency of certain categories, either from an issuer’s prior-year submission or relative to others in the current-year ACA market.

What you should know:

• While the baseline comparisons may seem burdensome, these checkpoints can identify problems early, and they allow issuers to implement corrections over time rather than all at once right before the final deadline.
• It’s always a good idea to develop baselines from sources distinct from those directly summarizing your EDGE inbound data.
• Failing a CMS check is not the end of the world. However, identifying and correcting the issue immediately will prevent you from falling behind.
• It’s possible to be flagged as an outlier even if your data is accurate—simply double-checking your submission and responding to CMS as such should be sufficient.

EDGE server management

Why it’s important: Assuming you’re not accepting the risk adjustment default charge up-front, you need to provision and maintain an EDGE server. Whether hosting on premises or standing up a virtual AWS server, smart planning can save you costs and make the process more efficient.

What you should know:

• The physical costs to power a server are real and can add up over time. Because CMS releases the timing of its key updates and report generation, strategically powering down the server can significantly reduce operating expenses over the year.
• Leverage the standard EDGE reports that CMS provides at certain points in the cycle (such as the RATEE, RARSD, RACSD, and HCRP) to help internal risk adjustment estimation efforts.⁶ But don’t ignore local commands that can ping the Test or Production environments to produce this information with a cadence that better fits your workflows.
• There are opportunities to automate certain tasks through simple scripting commands. Some examples include:
  • AWS scripts to power up and power down instances that fit within the CMS processing schedule, as described above.
  • Linux shell scripts to routinely execute remote commands submitted and requested by CMS, which will keep the server in compliance.
  • Additional Linux shell scripts to generate risk adjustment reports outside the CMS processing schedule.

• Medical diagnosis codes and National Drug Codes (NDCs) form the backbone of the ACA risk adjustment program.
• An issuer may need to amend the information reported to EDGE when it should differ from data stored on the claim systems.
• The EDGE supplemental diagnosis submission file is the vehicle to correct member diagnosis information.
• While results vary, we’ve seen supplemental diagnosis submissions increase transfers between 2% and 4% of premium, with some issuers realizing even more favorable results.

What you should know:

• The majority of supplemental information is sourced from a review of medical records.⁷
• But the ESBRs do not preclude issuers from using supplemental data files to correct or augment diagnoses for other reasons (such as when the number of diagnosis codes from an encounter exceeds what a healthcare provider can accommodate). Near the end of the EDGE cycle, this may be the only feasible way to revise errant diagnosis codes, given the lead time needed to reprocess a claim.
• Certain ESBRs apply specifically to supplemental data, and waiting until the end of the cycle to produce and submit your first set of files may not leave enough time to achieve 100% acceptance. This information is very important, so begin submitting as early as you can—even if your chart review efforts are still in progress.
• Regular meetings with coding teams and/or vendors can ensure the timing and file structure meet your predefined specifications.
• CMS frequently promotes data accuracy and emphasizes this in RADV audits. Insurers are expected to engage in bilateral chart reviews and should submit appropriate additions and deletions in the supplemental data files.
• Track your efforts after the submission cycle to benchmark results and improve the process over time.
• Improving coding accuracy up-front will lessen the efforts to review charts and assemble supplemental records on the backend. These prospective initiatives can address gaps in member care and incomplete clinical documentation before encounter data reaches your claim system.

Tracking key program changes

Why it’s important: Given the extensiveness of just the “standard components” of the annual EDGE cycle, it can be easy to go on autopilot and let other points of interest pass on by. Every year, though, CMS deploys updates and enhancements that impact the risk adjustment program—some creating unexpected bumps in the road if you’re not paying attention.

What you should know: The following is the short list of items we suggest keeping on your radar.

• EDGE updates/risk score model changes: Many are routine and uneventful; some can be impactful. It’s beyond our scope here to recite a laundry list of past changes. But there was an instructive example from last February when CMS removed hydroxychloroquine⁸ from the list of risk adjustment-eligible NDCs (without advanced notice to the market). The result was significantly lower aggregate risk scores for most issuers just months before the EDGE deadline.
• Telehealth: With the onset of COVID-19 and the rollout of public health emergency (PHE) regulations, telehealth quickly became a necessary tool for nonemergency and “nonessential” care when in-person visits were either challenging or prohibited. At the very least, it’s likely telehealth utilization will remain higher than prior levels, even if it’s unclear at this time how much care will be delivered through this avenue in the future. This makes it important to understand the risk adjustment eligibility rules governing telehealth usage and data submissions, as well as staying up to speed on any long-term changes.
• RADV: RADV rules have developed over time,⁹ so work closely with your IVA vendor or risk adjustment consultant on any major items affecting the process. The most recent changes of interest¹⁰ involved the rules determining outliers and the magnitude of potential risk score adjustments, as well as shifts in long-term RADV, risk transfer adjustment, and MLR recognition timing.
• Simulation zone: CMS recently enhanced the EDGE server with the rollout of the Simulation zone,¹¹ which provides access to current, archived, and even future EDGE software versions (as allowed by CMS). The information available to issuers may be useful for assessing the impact of the HHS-HCC risk adjustment model and software changes and, perhaps, even lend certain insights that can be incorporated into rate development and strategy.¹² While the exact functionality is still new, issuers should consider integrating outputs from the Simulation zone into their risk adjustment operations where possible.

You've arrived at your destination

The annual EDGE submission doesn’t have to be a stressful endeavor. A well-thought-out plan, proper and timely arrangements, and staying on course when the wheels seem like they’re about to fall off will go a long way in ensuring a successful cycle while reducing the worries and headaches.

Caveats, limitations, and qualifications

Peter Fielek and Jason Petroske are actuaries for Milliman and members of the American Academy of Actuaries. They meet the qualification standards of the Academy to render the actuarial opinion contained herein. To the best of their knowledge and belief, this paper is complete and accurate and has been prepared in accordance with generally recognized and accepted actuarial principles and practices.

The material in this paper represents the opinion of the authors and is not representative of the views of Milliman. As such, Milliman is not advocating for, or endorsing, any specific views contained in this paper related to the ACA risk adjustment program.

The information in this paper is designed to provide a framework for managing the External Data Gathering Environment (EDGE) server. This information may not be appropriate, and should not be used, for other purposes. We are not lawyers and, therefore, cannot provide legal advice. Confer with appropriate legal counsel or compliance areas before use of the information.

We do not intend this information to benefit any third party that receives this work product. Any third-party recipient of this paper that desires professional guidance should not rely upon Milliman’s work product but should engage qualified professionals for advice appropriate to its specific needs. Any releases of this paper to a third party should be in its entirety.

In preparing this analysis, we relied upon the following publicly available information from CMS:

• EDGE server business rules
• Risk adjustment data validation protocols
• The HHS-Operated Risk Adjustment Technical Paper on Possible Model Changes, published October 26, 2021
• Various REGTAP webinar slides

We accepted this information without audit. If this information is inaccurate or incomplete, or at any time materially changes, conclusions drawn from it may also change. Differences between the theory discussed in this article and actual results depend on the extent to which future experience conforms to the assumptions made for this analysis. It is certain actual experience will not conform exactly to the assumptions used in this analysis for a variety of reasons, including changes to ACA risk adjustment regulations or guidance in future rulemaking or as a result of legislation or litigation. Insurers subject to the ACA risk adjustment program should monitor their results and take corrective action when necessary.

¹ See footnote 3 in the Milliman white paper "ACA Risk Adjustment Management: Higher EDGE-ucation," available at https://www.milliman.com/en/insight/aca-risk-adjustment-management-higher-edge-ucation#3.

² Millen, B.N. & Petroske, J.J. (December 2017). ACA Risk Adjustment Management: Going All-out Milliman White Paper. Retrieved December 22, 2021, from https://www.milliman.com/en/insight/aca-risk-adjustment-management-going-all-out.

³ CMS (August 2020). Health Insurance Oversight System Rate & Benefits Information System User Manual. Retrieved December 22, 2021, from https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/HIOS-RBIS-Manual.pdf.

⁴ REGTAP. Distributed Data Collection (DDC) for Risk Adjustment (RA) Including High-Cost Risk Pool (HCRP): EDGE Server Plan Data Overview. Retrieved December 22, 2021, from https://www.regtap.info/uploads/library/BY21_EDGEServerPlanData_091421_5CR_091421.pdf.

⁵ REGTAP. Distributed Data Collection (DDC) for Risk Adjustment (RA) Including High-Cost Risk Pool (HCRP): Quantity and Quality Data Evaluation Process. Retrieved December 22, 2021, from https://www.regtap.info/uploads/library/EDGE_Server_Quantity_Quality_101921_5CR_101921.pdf.

⁶ Fielek, P., Huth, E., & Petroske, J.J. (February 2021). Estimating ACA Risk Transfers: It’s a Tough Job, but Someone Has to Do It. Milliman White Paper. Retrieved December 22, 2021, from https://us.milliman.com/en/insight/estimating-aca-risk-transfers-its-a-tough-job-but-someone-has-to-do-it.

⁷ Mattie, L.L., Millen, B.N., Petroske, J.J., & Vandagriff, A. (December 2017). ACA Risk Adjustment Management: Cracking the Code. Milliman White Paper. Retrieved December 22, 2021, from https://www.milliman.com/en/insight/aca-risk-adjustment-management-cracking-the-code.

⁸ CMS. HHS-Developed Risk Adjustment Model Algorithm “Do It Yourself (DIY)” Software Instructions for the 2020 Benefit Year: April 15, 2021 Update. Retrieved December 22, 2021, from https://www.cms.gov/files/document/cy2020-diy-instructions04132021.pdf.

⁹ Gleed, C., Karcher, J., & Petroske, J. (February 2020). A Look Behind the Curtains. Milliman White Paper. Retrieved December 22, 2021, from https://www.milliman.com/-/media/milliman/pdfs/articles/a-look-behind-the-curtains.ashx.

¹⁰ The full text of the "Amendments to the HHS-Operated Risk Adjustment Data Validation (HHS-RADV) Under the Patient Protection and Affordable Care Act's HHS-Operated Risk Adjustment Program" rule is available at https://www.federalregister.gov/documents/2020/12/01/2020-26338/amendments-to-the-hhs-operated-risk-adjustment-data-validation-hhs-radv-under-the-patient-protection.

¹¹ REGTAP. Distributed Data Collection (DDC) for Risk Adjustment (RA) Including High-Cost Risk Pool (HCRP): EDGE Server Announcements. Retrieved December 22, 2021, from https://www.regtap.info/uploads/library/DDC_SeriesX_ES_Announcements_072721_5CR_073021.pdf.

¹² CMS intends to release full simulations of 2022 transfer results based on the proposed model enhancements. See https://www.cms.gov/files/document/2021-ra-technical-paper.pdf.