Since Medicare adjusts payments to insurers based on health risks of their customers, the changes will affect plans differently. When combined with expected growth in plan risk scores due to coding, the yearly adjustments could mean that some plans would experience revenue growth of 1.05 percent, according to CMS.
For health insurers who rely significantly on Medicare for their earnings, the proposed cuts can have serious implications. Humana said due to its geographic and member diagnosis mix the CMS proposal would mean a 1.25 to 1.75 percent cut for its managed care company in 2016, according to a Reuters report.
The proposed payment cut for next year is more modest than last year’s proposed rate reductions of 1.9 percent. However, due to aggressive lobbying by the medical industry, the full cuts never went into effect, according to a report from The Hill.
The finalized payment rates are expected to become final April 6.
More articles on healthcare finance:
IRS delays penalties for certain health reimbursement arrangements
8 recent hospital outlook and rating actions
5 hospital CFOs in the headlines this week
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
