Updating the Chronic Illness and Disability Payment System

Of the 38 Medicaid programs that risk adjust payments to Medicaid managed care organizations (MCOs), 33 of them use the Chronic Illness and Disability Payment System (CDPS). There has been recent interest in adding social determinants of health (SDH) into risk-adjustment models.

To update the CDPS models using recent MCO data based on the International Classification of Diseases version 10 coding system and to explore whether indicators of SDH are predictive of expenditures.

Data from 3 national Medicaid MCOs and 8 states are used to update the CDPS model. We test whether spending on Medicaid beneficiaries living in economically and socially deprived communities is greater than spending on similar beneficiaries in less deprived communities.

Medicaid beneficiaries with full benefits and without dual eligibility under Medicare enrolled in Medicaid MCOs in 8 states during 2017-2019, including 1.4M disabled beneficiaries, 9.2M children, and 6.4M adults.

Health care eligibility and claims records. Indicators based on the Social Deprivation Index were used to measure SDH.

The revised CDPS model has 52 CDPS categories within 19 major categories. Six major categories of CDPS were revised: Psychiatric, Pulmonary, Renal, Cancer, Infectious Disease, and Hematological. We found no relationship between health care spending and the Social Deprivation Index.

The revised CDPS models and regression weights reflect the updated International Classification of Diseases-10 coding system and recent managed care delivery. States should choose alternative payment strategies to address disparities in health and health outcomes.