The Centers for Medicare & Medicaid Services (CMS) proposes a modest 0.95 percent reduction in Medicare Advantage payments to providers for 2016--a proposal that is not sitting well with the hospital sector.
The American Hospital Association (AHA) has registered its objections to the cuts in a letter to Andrew Slavitt, CMS' acting administrator.
"Cuts in Medicare Advantage and Part D payments have a significant downstream impact on beneficiaries and providers," Linda Fishman, AHA's senior vice president of public policy analysis and development, wrote in the letter. Among the negative impacts: Increased premiums for Medicare Advantage and Part D enrollees, greater cost sharing and narrow provider networks.
Prior calculations made by the insurance industry concluded that total Medicare Advantage revenue would actually increase in 2016, but that the bottom lines of some large insurers would take a hit, FierceHealthPayer previously reported.
The AHA also balked at a proposal that would cap total risk-adjustment payments at pre-2000 levels commencing in 2017.
"The AHA is very concerned that this would result in reduced payments to Medicare Advantage plans on the back of other cuts to the program, as well as limit the benefit of risk-adjustment, which is needed for the sustainability of plans that enroll higher-acuity populations," Fishman wrote.
The AHA also asked CMS to reconsider the weighting of its star-rating program in some categories, noting in the letter that "performance on many quality measures is influenced not only by the actions of health plans and providers, but also by a range of socioeconomic factors beyond their control, such as poverty and access to resources in the community that support health. Failing to account for these factors in comparing quality performance can lead to some plans and providers scoring more poorly on measures than others simply because they care for larger proportions of disadvantaged patients."
In addition to those proposals, CMS also suggested that Medicare Advantage health plans operating more than one contract of the same product type under the same legal entity should consolidate the contracts under a single contract starting next year, according to the National Law Review.