Medicare Advantage Gets 2021 Pay Bump Amid COVID-19 Rule Changes

CMS on Monday announced a 1.66% average increase for 2021 Medicare Advantage (MA) rates, but this announcement may be less important to health plans than ways the agency is handling quality reporting and enforcement issues in light of the ongoing coronavirus disease 2019 (COVID-19) crisis.

This was higher than the proposed rate of 0.93%, but less than the increase MA plans received in 2020.

Already, CMS has waived rules to allow historic expansion of telehealth services and relaxed reporting requirements for the Quality Payment Program. Monday’s announcement brought more of the same, including a promise to provide “maximum flexibility” to make sure health systems have “continuous and predictable payments.”

A CMS fact sheet said the expected average change in revenue is 1.66%; however, officials said this did not reflect adjustments for “underlying coding trend.” In other words, if Medicare beneficiaries have multiple diagnoses, average payments could rise as much as 3.56%.

Renal care. Next year’s repricing reflects CMS’ implementation of “the kidney acquisition cost carve-out.” Under the 21st Century Cures Act, CMS is creating separate rates for patients with end-stage renal disease (ESRD) who are enrolled in MA plans. Organ acquisition costs are excluded, and the payment methodology outlined in the final notice remains unchanged from recent years. CMS’ fact sheet said the trend factor for MA ESRD state-level rates for 2021 will be 4.04%, an increase from the proposed 2.8%. Kidney acquisition will be covered under fee-for-service.

Quality data reporting. Monday’s announcement reminded health plans of the COVID-19 emergency interim rule that was published in Federal Register, which eliminates 2020 collections of Healthcare Effectiveness Data and Information Set (HEDIS) and Medicare Consumer Assessment of Healthcare Providers and Systems (CAHPS) data. Instead, CMS will use measures based on those HEDIS and CAHPS data collections with earlier values from the 2020 Star Ratings unaffected by COVID-19.

Prescription drugs. CMS also seeks feedback for Part D program to promote more competition in generic drugs. This would encourage Part D sponsors to use favorable tier placement and formulary management tools to get beneficiaries to use generic products.

CMS is also seeking input on new measures for ESRD care, prior authorizations, physical functioning activities of daily living, and initial opioid prescribing in Part D.