CMS proposes slight decrease in Medicare Advantage rates for 2016

But volume, risk-scoring growth should mean slight revenue growth, agency said

The Centers for Medicare & Medicaid Services has proposed a 0.95 percent decrease in Medicare Advantage (MA) reimbursement rates for 2016, according to a fact sheet from the agency.

However, risk-scoring adjustments should give MA payers a 1.05 percent increase in total revenue, the fact sheet said. Those with higher quality ratings and overall customer satisfaction can expect additional growth as well, the agency said in an accompanying statement.

These changes to the quality ratings should help insurers offset the proposed decrease in reimbursement rates, industry analysts told the Wall Street Journal. So, too, will rising enrollment in Medicare Advantage plans--17 million members this year, the article said, compared to 12.2 million just four years ago. Sixty percent of enrollees are in four- or five-star plans, CMS said in its statement.

Medicare Advantage insurers saw a 0.4 percent reimbursement rate increase in 2015 and a 3 percent increase in 2014, FierceHealthPayer previously reported. The latter increase came after CMS initially proposed a 2.2 percent payment reduction and followed an intense lobbying effort from America's Health Insurance Plans.

AHIP President and CEO Karen Ignagni said in a statement that the proposed rate cut for 2016, at a time of rising healthcare costs, could be dangerous. "Protecting the millions who rely on this program should mean no further cuts," she said. Reimbursement rates over the last two years have amounted to 10 percent cuts in MA payment rates, the statement said.

In addition, a group of 53 Senators sent a letter to CMS Administrator Marilyn Tavenner calling on the agency to maintain payment levels and provide a "stable policy environment."

Comments on the CMS advanced notice are due to the agency March 6. The final Medicare Advantage rate announcement will be published April 6, CMS said.

For more:
read the fact sheetstatement and advanced notice (.pdf) from CMS
read the Wall Street Journal article
here's the AHIP statement
read the Senators' letter (.pdf)

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