CMS proposes hike in Medicare Advantage payments: 7 things to know

CMS has proposed a number of payment and policy changes to the Medicare Advantage and Part D prescription drug programs for next year, including an increase in payments to the health insurers who offer Medicare Advantage plans.

Here are seven takeaways from CMS' 2017 payment and policy proposal.

1. CMS proposed raising Medicare Advantage payment rates 1.35 percent on average in 2017. When combined with expected growth in plan risk scores, CMS said it anticipates Medicare Advantage plans and Part D sponsors will see payments increase by 3.55 percent on average next year.

2. Under the proposal, payments to health insurers will vary based on several factors, including the region of the U.S. the plans are sold.

3. The payment increase is good news for major health insurers, such as Aetna, Anthem and UnitedHealthcare, which offer Medicare Advantage plans. Insurers and lawmakers urged the government not to cut payment rates next year, arguing a decrease in payments would force insurers to cut benefits, according to Reuters.

4. CMS proposed revising the methodology used to risk adjust payments to more closely align reimbursement with costs for dually eligible beneficiaries.

5. Under the proposal, the Star Ratings program measures would be refined to reflect the socioeconomic and disability status of a plan's enrollees.

6. "These proposals continue to keep Medicare Advantage strong and stable and as with this past year, support the provision of high quality affordable care to seniors and people living with disabilities," said CMS Acting Administrator Andy Slavitt.

7. Comments on the 2017 Advance Notice and Draft Call Letter will be accepted through March 4. CMS said it expects to publish a final rate announcement April 4.

More articles on Medicare Advantage:

10 Medicare Advantage plans ranked by member satisfaction
CMS to expand RAC program to Medicare Advantage: 6 things to know
The untapped potential for value-based care in Medicare Advantage: Q&A with Deloitte's Brian Flanigan

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