CMS proposes 0.25% increase in Medicare Advantage payments for 2018

CMS is offering a more modest 0.25 percent increase in payment rates for Medicare Advantage insurers, a year after a 0.85 percent hike, in its proposed MA update for 2018.

“Medicare Advantage is an essential, growing part of the Medicare program” said Patrick Conway, MD, CMS Acting Administrator. “These proposals will continue to keep Medicare Advantage strong and stable and provide high quality, affordable care to seniors and people living with disabilities."

The 0.25 percent would be the increase if a plan sees no alteration in risk scores. Factoring in risk calculations, insurers can expect an 2.75 percent average change in revenue.

How those risk scores will be calculated may change from what was expected in 2018. Under the Obama administration, CMS had been ramping up how much encounter data was blended into the risk score, going from 10 percent in 2016 to 25 percent in 2017.

Encounter data was supposed to make up 50 percent of the score for 2018, but CMS is now proposing to keep the 2017 blend in place for next year. It will also solicit comments “on whether and how to apply a uniform industry-wide adjustment to the encounter data-based portion of the blended risk score.”

The initial reaction from insurers’ largest trade group, America’s Health Insurance Plans, was muted.

“AHIP is carefully reviewing this advance rate notice to ensure that the program is protected from harmful cuts,” AHIP President and CEO Marilyn Tavenner said in a statement. “We are committed to ensuring that seniors continue to have access to affordable, high-quality care, and that Medicare Advantage is positioned for long-term stability.”

Comments on the proposed notice are due by March 3, with final rates expected to be published April 3.