CMS finalizes slight bump in Medicare Advantage payment rates

The federal government will raise the payment rates for Medicare Advantage plans by an average of 0.85 percent next year--though that increase is less than it previously proposed.

The Centers for Medicare & Medicaid Services (CMS) had said in February that it expected an average 1.35 percent payment bump, with the average expected change in revenue for plans at 3.55 percent.

The final average increase of 0.85 percent is smaller than the projected increase primarily because of "technical updates in the risk adjustment normalization factor," CMS says. With the final payment rate, health plans will likely see an average overall revenue increase of 3.05 percent.

The insurance industry and other stakeholders have conducted an intense lobbying effort in recent months to convince policymakers to avoid making further cuts to the MA program, saying such policies would jeopardize care for the more than 17 million beneficiaries with Medicare Advantage plans.

America's Health Insurance Plans (AHIP), which played a major role in the lobbying push, expressed lukewarm support for CMS' finalized payment rates Tuesday. In a statement emailed by the group to FierceHealthPayer, AHIP CEO Marilynn Tavenner said an "overwhelming" bipartisan congressional outreach effort led CMS to take steps that "mitigate the negative impact of policy changes related to risk adjustment and encounter data."

Yet AHIP is less pleased with CMS' plan to go forward with a payment policy change that will result in cuts to Medicare employer retiree plans. The agency said it will phase in the new policy over two years rather than one in response to stakeholder feedback.

"More can be done to ensure stability for more than 3 million seniors who depend on Medicare employer retiree plans," Tavenner said.

Better Medicare Alliance, an advocacy group, was more critical, saying in a statement that CMS' policy "essentially discounted analyses that indicated the potential negative impact on retirees who receive Medicare Advantage coverage through a former employer, union or state and local government entities."

The new policies also make changes that CMS says will improve the accuracy of payments to MA plans that serve dually eligible or low-income beneficiaries, and they implement an interim adjustment to MA star ratings in order to reflect the socioeconomic and disability status of a plan's enrollees.

In addition, CMS says it is finalizing policies that would help combat opioid misuse by "encouraging safeguards before an opioid prescription is dispensed at the pharmacy and maintaining access to needed medications."

To learn more:
- read the final 2017 Rate Announcement and Call Letter
- here's CMS' announcement
- check out the CMS fact sheet
- here's the Better Medicare Alliance statement

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