CMS Proposes Medicare Advantage Rate Reduction

The Centers for Medicare & Medicaid Services (CMS) intends to implement a 1.9% rate reduction in payment rates for Medicare Advantage plans in 2015. Some payers fear that number may increase as fees associated with the Affordable Care Act (ACA), as well as other policy changes, also begin to impact physician reimbursement. This includes Medicare rate cuts associated with the "sequestration."

Senator Orrin Hatch said the proposed payment reductions “threaten a successful program for seniors, and must be overturned. Medicare Advantage is extremely popular for a reason—run through the private market, seniors gain access to high-quality and coordinated care with additional benefits that they otherwise wouldn't get. Regrettably, this administration continues to undermine this critical program.”

Despite voiced concerns, CMS maintains that the changes are required.

“The reductions should continue to go into effect in order to ensure more parity between [Medicare Advantage] plans and traditional Medicare with respect to how much is spent on beneficiaries,” said the Center for Medicare Advocacy. “Further, if overall Medicare costs continue to grow more slowly than expected, which is good news for Medicare and the federal budget, [Medicare Advantage] payment should be adjusted accordingly. There is no reason [Medicare Advantage] payment should increase at the same time that overall Medicare costs are slowing.”

The costs and benefits of Medicare Advantage plans vary nationally. Many remain sensitive to payment cuts since nearly 16 million senior citizens rely on these plans for health coverage.

‘‘Another round of payment cuts would be devastating to... seniors and people with disabilities that have chosen to enroll in Medicare Advantage for the better benefits and higher quality coverage these plans provide,” said Karen Ignagni, CEO of America’s Health Insurance Plans.

CMS’s final decision on the cuts is expected April 7.

Around the Web

Obama Administration Proposes 1.9% Cut In Medicare Advantage Payments [Kaiser Health News]

Impact Of Medicare Advantage Cuts On Seniors Sharply Disputed [Kaiser Health News]