The rates for Medicare Advantage (MA) and Part D plans for the 2021 coverage year are expected to increase by 4.07%, a bump from the nearly 3% proposed earlier this year.
The Centers for Medicare & Medicaid Services (CMS) released the final rates late Monday. The agency also boosted payments to MA plans for beneficiaries with end-stage renal disease (ESRD), a major request from insurers.
CMS proposed an advanced payment increase of 2.8% for ESRD treatments. However, the agency decided to increase that rate to 4.04% for 2021.
The payment methodology, however, for ESRD patients will not change from what was proposed.
Insurers complained to CMS in comments that they need higher ESRD payments in order to cover the influx of beneficiaries with the disease. Plans complained that ESRD beneficiaries cost more to cover than traditional Medicare beneficiaries because a concentrated dialysis provider market can leverage a more favorable contract from an MA plan that would pay providers well above traditional Medicare.
A February 2019 report from consulting firm Wakely found providers could decrease by 2% for MA plans due to the new influx of ESRD beneficiaries if the plans don’t hike premiums.
Currently, a beneficiary with ESRD can only sign up for MA if they were already in such a plan when they were diagnosed with the disease. But the 21st Century Cures Act declared that starting next year a beneficiary can enroll in MA even if they weren’t in a plan before.
CMS also finalized as part of the rate notice:
- A coding pattern adjustment of 5.90% for 2021 to reflect differences in diagnosis coding between MA organizations and fee-for-service providers.
- A proposal to continue the phase-in of risk adjustment payments using the CMS-Hierarchical Condition Categories (CMS-HCC) model. The 21st Century Cures Act calls for a phase-in of the changes over a three-year period that ends in 2022. For the 2021 risk scores, 75% will be calculated with the 2020 CMS-HCC model and 25% under the 2017 model.
The agency also added that the final notice takes into account the COVID-19 outbreak that has wreaked havoc for payers and providers.
The rule eliminates the 2020 collection of data from the Healthcare Effectiveness Data and Information Set for special needs plans and the Medicare Consumer Assessment of Healthcare Providers and Systems survey. Instead, CMS will rely on data collections that weren’t affected by “public health threats posed by COVID-19,” according to a release.
The goal is to help CMS determine how to assign star ratings for 2021 in the event “the virus prevents CMS from having validated data or results in systemic data integrity issues, or if CMS’s functions become focused on only continued performance of essential agency functions due to the pandemic.”