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Medicare Advantage

CMS has given the nod to proposed payment and policy changes in the Medicare Advantage and Part D prescription drug programs for 2017. The confirmed changes include a small payment increase to health insurers offering MA plans. Following are some specifics from the final rate notice the agency issued.

  • The final rule raises Medicare Advantage rates by an average of 0.85 percent in the year 2017. This is lower than the 1.35 percent, which the agency had proposed earlier in the year.
  • Considered beside expected growth in plan risk scores, CMS thinks the Medicare Advantage and Part D sponsors will have revenue rise by an average of 3.05 percent until 2017. The figure was 3.55 percent when
  • CMS mentioned it last in February, and the reason why it is smaller has been cited as to “technical updates in the risk adjustment normalization factor.”
  • In the final update, CMS has shifted the methodology used for risk adjust payments, in order to get reimbursements more closely aligned with costs where dually eligible beneficiaries are concerned.
  • The final rule refines the Star Ratings program to accommodate the socioeconomic and disability status of a plan’s enrollees.
  • By 2015, CMS had begun using diagnoses from encounter data towards the calculation of risk scores. This involved mixing data based risk scores with Risk Adjustment Processing System-based risk scores. CMS will carry on using the blend in 2017, but that will include a higher portion of data based risk scores than in this year.
  • The final rule has policies that, the agency says, will combat opioid overutilization through urging prescription and dispensation safeguards.
  • Earlier this year, CMS proposed terminating the bidding process for employer/union-only group waiver plans. Instead, it proposed the use of individual market non-Employer Group Waiver Plan bids for 2017, towards the establishment of county level payment amounts for EGWPs.
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The EGWP policy change will be phased over two years. By 2018, implementation of the policy will be completed, leaving only market plan bids, which can be used to calculate MA plan payments for employers.

After the release of the final rate notice, AHIP President and CEO Marilyn Tavenner acknowledged the steps CMS has taken to ease the burdens of policy changes related to risk adjustment and encounter data. However, she stated that, “more can be done to ensure stability for more than 3 million seniors who depend on Medicare employer retiree plans.”