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CMS: Payers May See 2.95% Rise in Medicare Advantage Revenue

CMS announced that payers can expect significant increases in Medicare Advantage revenues due to changes in drug reimbursements.

CMS announced possible 2.95% increase in Medicare Advantage revenues

Source: Thinkstock

CMS announced updates to the Medicare Advantage (MA) program and Part D Prescription Drug Program, including an expected 0.45 percent increase in revenues for payers and the potential for up to 2.95 percent in revenue growth.

“Medicare is committed to strengthening Medicare Advantage and the Prescription Drug Program by supporting flexibility and efficiency,” said CMS Administrator Seema Verma, MPH. “These programs have been successful in allowing innovative approaches that give Medicare enrollees options that best fit their individual health needs.”

CMS calculated the net payment impacts of the new rules based on individual payment categories. The effective growth rate of MA and Part D revenues following the announcement were estimated at 2.7 percent.

Growth in other payment categories included rebasing/re-pricing (0.3 percent), expected change in revenue (0.45 percent), and coding trend for payments (2.5 percent).

Other payment categories decreased growth which include a change in star ratings (-0.4 percent), normalization (-1.9 percent), and MA coding intensity adjustments (-0.25 percent).

After taking all the categories into account, CMS concluded that the impact of the new rules would increase revenues for these plans by 2.95 percent.

Other changes in the program include adjustments that improve enrollee choice and help mitigate patient safety risk involved with prescription opioids.

“CMS believes that Medicare Advantage Organizations and Part D sponsors, working with prescribing physicians, are in the best position to identify and employ best practices and the most appropriate care management interventions for enrollees using high dosage opioids,” CMS said.

“CMS expects all Part D sponsors to focus on improving the coordination of care among these enrollees using high dosage of opioids, and in particular, Medicare Advantage plans that include prescription drug coverage should consider expanding the care management they provide enrollees.”

In conjunction with the announcement, CMS released a fact sheet explaining to payers how CMS plans to pay MA and Part D sponsored plans.

CMS also published a offered Request for Information (RFI) to gather stakeholder input on regulatory and policy changes.  Interested parties may submit commentary until April 24, 2017

CMS hopes that alongside the rate announcement, stakeholders with provide valuable input through the RFI with beneficiary-minded suggestions.  

“In responding to the RFI, please provide CMS with clear and concise proposals that include data and specific examples that could be implemented to increase benefit flexibility, innovation and more affordable plan choices for beneficiaries,” the agency said. “If the proposals involve novel legal questions, analysis regarding CMS’ authority is welcome for CMS’ consideration.”

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