Medicare Advantage

CMS releases two public data sets regarding availability and use of particular services

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Medicare recipients, especially those with economic disadvantages, could see better healthcare and lower costs in 2017 as a result of proposed changes by the Centers for Medicare & Medicaid Services (CMS).

CMS released its recommendations for the Medicare Advantage and Part D Prescription Drug Programs in February and is nearing the end of a comment period. The deadline to comment on the proposals listed in the Advance Notice and Draft Call Letter is March 4.

The proposal includes a 1.35 percent increase in a baseline Medicare Advantage payment rate. The increase in Medicare rates is a positive one for health insurance companies. On average, revenue to Medicare Advantage insurers will go up 3.55 percent in 2017 after factoring in risk coding tendencies.

“These proposals continue to keep Medicare Advantage strong and stable and as with this past year, support the provision of high quality, affordable care to seniors and people living with disabilities,” said CMS Acting Administrator Andy Slavitt. “In particular, these proposals support investment in dually Medicare-Medicaid eligible individuals and those with complex socioeconomic needs.”

The proposed growth is in line with 2016 and is similar to the growth in Medicare fee-for service. CMS is also providing higher updates for plans improving quality in the care they give patients. CMS expects the extra benefits to be used to further enhance services to enrollees.

One group expected to see the effects of the changes in a dramatic way are those who are eligible for both Medicare and Medicaid and others listed as low-income. CMS is including new risk-adjustment subcategories for dual-beneficiaries for 2017. The new model is reportedly more accurate in predicting costs for those patients, who typically have different needs that those in higher income brackets.

The 2017 proposal will help dual beneficiaries in another way and is expected to improve their quality of care. Star ratings, which use clinical measures to show the level of care insurers are giving Medicare Advantage members, could also be adjusted under the proposal. That means those providers maintaining a well-rounded system of care meeting more patients’ needs in preventive and routine care, as well as sick care, could get higher bonus payments.

That is expected to benefit a large number of people because 71 percent of Medicare Advantage enrollees are in four or five star contracts, quadrupling since 2009.

The new proposal is offering a lot of hope for beneficiaries, compared to previous years when the programs suffered from mandated cuts under the Affordable Healthcare Act (ACA). Average payments in 2017 have a positive outlook and John Gorman, a consultant for Medicare Advantage insurers and a former CMS official, said next year is “the best rate environment we’ve seen in years.”

Premiums are in line with the changes with officials stating average Medicare Advantage premiums have fallen 10 percent from 2010 to this year. Also, the one-year moratorium of ACA’s health insurer tax did not result in lower Medicare Advantage payments this year. Congress forsake the tax for 2017 in the recent budget after they were heavily lobbied. CMS wants plans to use the money from the tax break to improve their products.

The number of Medicare plan choices will be about the same this year as in 2015. Officials said another positive trend is growing access to supplemental benefits like dental and vision plans. Officials also said the proposed policy changes are expected to amount to overall improvement in the Medicare Advantage program and serve more people with diverse needs.

Medicare Advantage has a record high enrollment since 2010 and serves more than 17.1 million people, amounting to nearly 32 percent of all Medicare patients. The growth – with the rate changes – are predicted to amount to millions more dollars to insurers. Observers said more money in the system will lead to more investment in quality health care for patients.

Beneficiaries can look at the 2017 Advance Notice and Draft Call Letter by going here and selecting “2017 Advance Notice.” Comments on the proposed Advance Notice and Draft Call Letter are invited from industry, seniors, consumer advocates, and the public and must be submitted by March 4, 2016. The 2017 Final Rate Announcement and Call Letter will be published on Monday, April 4, 2016.

A general fact sheet on the 2017 Advance Notice and Draft Call Letter is available for viewing here.