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Medicare Advantage plans to see a modest increase in payments



The Centers for Medicare and Medicaid Services (CMS) announced this week that Medicare Advantage plans would see a 0.4 percent boost in payment rates for 2015.
 
This small payment boost is a change from CMS's February proposal that would have reduced Medicare Advantage plans payment rates by 1.9 percent.
 
This announcement comes on the heels of new data that predicts falling Medicare costs due to healthier baby boomers aging into the system. Healthier beneficiaries in Medicare have led to a downward drop in risk adjustment for the program. CMS has also proposed an improved risk adjustment methodology to account for patient’s health status (severity of illness) and demographics. Plan bids will be based on these criteria.
 
Along with this modest payment increase for Medicare Advantage plans, CMS announced that it plans to discontinue a three-year quality bonus demonstration project that shielded some plans from cuts required by the Affordable Care Act. CMS also said it will limit how much Medicare Advantage plans are allowed to increase beneficiaries’ premiums in 2015. This proposal limits these increases to the equivalent of $32 per month annually in 2015, down from $34 in 2014.
 
With Congress’s recent passage of a bill that will update California's outdated Medicare localities, the Medicare Advantage rates in the 14 affected counties will see an even greater increase because the rates are partially built on the Medicare fee-for-service rates.
 
Contact: Elizabeth McNeil, (800) 786-4262 or emcneil@cmanet.org.


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