CMS Proposes 0.25% Medicare Advantage Rate Increase

February 2017 ~

On the first day of the month, CMS released its proposed changes to the Part D prescription drug program and Medicare Advantage for calendar year 2018. If accepted, the proposed rate would increase payment rates by a net 0.25% and when combined with expected growth in plan risk scores, CMS anticipates the MA plans and Part D sponsors will see an average revenue increase of 2.75%.

CMS has proposed to use the same proportion of Risk Adjustment Processing System and encounter data for purposes of calculating risk adjustment as it did in 2017 as well as apply the minimum coding intensity adjustment allowable under federal law.

Accompanying the proposed rate increased, CMS has also proposed several changes to the Medicare Advantage Star Ratings program, the service category cost-sharing requirements, as well as the drug utilization review controls.

“Medicare Advantage is an essential, growing part of the Medicare program” said Patrick Conway, MD, CMS Acting Administrator. “These proposals will continue to keep Medicare Advantage strong and stable and provide high quality, affordable care to seniors and people living with disabilities.”

CMS will accept comments on the 2018 Advance Notice and Draft Call Letter through March 3rd, and expects to publish a final rate announcement and call letter on April 3rd.


Source(s): CMS, February 1, 2017; Reuters, February 1, 2017; Modern Healthcare, February 1, 2017; Healthcare Finance News, February 1, 2017; HealthcareDIVE, February 1, 2017; AHIP Solutions SmartBrief, February 2, 2017 Becker’s Hospital Review, February 2, 2017