Medicare Advantage Payment Rates Increased Slightly By CMS

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Medicare Advantage Payment

It is reported that the Medicare Advantage health plans will be seeing an average payment increase of 0.45 percent in the year 2018. The payment increase proposed by the Centers for Medicare and Medicaid Services (CMS) in their advanced rate notice released on February 1 was 0.25 percent.

The average change in revenue with this increase, while taking into account the various coding trends, would be 2.95 percent, rather than the 2.75 percent change in the notice by CMS in February. This latest update in the payment increase in due to the changes in the coding acuity, said a senior Medicare official. The latest update takes into account the increase in risk adjustment payments caused by demographics and more chronic conditions that are being reported in the diagnosis codes to the CMS.

CMS had implemented a 0.25 percent increase in payment for 2017, which was expected to double to become 0.50 in 2018. When CMS announced another 0.25 percent increase in February, about 350 members of the Congress voiced against the move and shared their concern about the cut.

“While CMS made adjustments to some policies, and we welcome the request for information, we believe more must be done to ensure beneficiaries are well supported in achieving their best health,” said America’s Health Insurance Plans, CEO and President Marilyn Tavenner. “We look forward to working with the agency to reduce unnecessary regulatory burdens, enhance program flexibility and innovation, and promote delivery system reform and patient engagement.”

CMS is also releasing a request for information for Medicare Part D and Medicare Advantage for the first time with comments due by April 24, 2017. The federal agency has encouraged the stakeholders to comment on operational flexibility and options like benefit design. “With the new administration, there is an interest in collecting ideas from the public about how we can foster additional innovation,” senior officials said. “It’s a broad request.”

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The risk scores are calculated by CMS using the diagnoses that are submitted by Medicare Advantage organizations and Medicare Fee-For-Service providers. These scores are based on the data from the Risk Adjustment Processing System (RAPS).

In the recent years, the scores have also included encounter data that is submitted by the Medicare Advantage organizations. “We’ve gotten numerous concerns from plans in using encounter data,” officials said. CMS used a mix of 75% RAPS and 25% encounter data for 2017, but after listening to the many concerns, the agency said that the mix would be 85% to 15% in 2018.

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