On January 10, 2025, CMS released the CY 2026 Advance Notice of Payment. The Advance Notice is the mechanism CMS uses to notify Medicare managed care and prescription drug plans, including PACE organizations, of changes in Medicare Advantage and Part D payment policies for the upcoming contract year.   

NPAs review of the ANP indicates that for CY 2026, CMS is proposing a new risk adjustment model for PACE, to align it with the risk adjustment model in place for Medicare Advantage plans (2024 CMS-HCC v.28), and a corresponding transition away from the risk adjustment processing system (RAPS) to rely on diagnoses submitted through the Encounter Data Reporting System (EDRS) over the next three years. These changes will impact risk score calculations related to the 2017 CMS-HCC PACE model (v.22) for non-ESRD aged/disabled participants, the 2019 ESRD, and 2020 RxHCC risk adjustment payment models. 

While NPA is encouraged by the proposed 2024 CMS-HCC (v28) inclusion of Alzheimer’s disease and other diagnoses prevalent in the PACE participant population, NPA notes that the model does not include features applied in payment models for other high need, high-cost populations. 

Given the magnitude of changes proposed for PACE payments in Calendar Year 2026, NPA strongly recommends CMS undertake an assessment of the accuracy of risk adjustment for PACE. Based on the assessment, potential improvements to the payment model for PACE should be developed and applied. 

NPA has developed a response to CMS’ request for comment on the Advance Notice in consultation with the payment subcommittee of NPA’s public policy committee. Please consider submitting a comment on behalf of your individual organization in support of the recommendations in NPA's comment.