CMS reverses course on Medicare Advantage cuts

Health insurers operating Medicare Advantage plans no longer have to fear impending cuts to the program. Not only did the Centers for Medicare & Medicaid Services not implement its proposed cuts, it actually increased rates for next year.

Instead of lowering rates for Medicare Advantage plans as CMS initially proposed in February, insurers will see a 0.4 percent boost, the agency announced Monday afternoon in a call letter. That increase is slightly higher than what insurers requested.

The new payment rates set a "stable path" for Medicare Advantage plans, according to CMS. "We believe that plans will continue their strong participation in the Medicare Advantage program in 2015 and beneficiaries will continue to have access to a wide array of high quality and affordable Medicare health and drug plans," Jonathan Blum, CMS principal deputy administrator, said yesterday in a statement.

Explaining why the agency reversed course on the proposed cuts, Blum said at a press briefing that the health insurance industry "urged us to use whatever means we could to keep the rates close to parity to where they are today," Reuters reported.

America's Health Insurance Plans, which claimed the Medicare Advantage cuts would actually amount to a 5.9 percent reduction, launched an aggressive campaign against the proposed cuts, including a series of TV ads urging seniors to contact their Congressional members to oppose the proposal.

Despite recognizing CMS for its reversal, AHIP said it's still worried about future rate cuts. "The changes CMS included in the final rate notice will help mitigate the impact on seniors, but the Medicare Advantage program is still facing a reduction in payment rates next year on top of the 6 percent cut to payments in 2014," AHIP President and CEO Karen Ignagni said in a statement

"We remain concerned about the impact year-over-year cuts to Medicare Advantage would have on the high-quality, affordable coverage millions of seniors like and rely on today," she said.

To learn more:
- here's the CMS statement and call letter (.pdf)
- read the Reuters article
- see the AHIP statement