Insurers Comment on Proposed Medicare Advantage Payment Changes
Feb. 20—Health insurers expressed concern that the proposed 2.2 percent decline in Medicare Advantage payment benchmark rates will negatively affect revenue.
The payment changes are part of a proposed rule from the Centers for Medicare & Medicaid Services (CMS) that aims to align payments in Medicare Advantage (Part C) with fee-for-service Medicare (Parts A and B).
In a filing with the Securities and Exchange Commission, Humana said that changes in the prescription drug industry pricing benchmarks may adversely affect the company’s financial performance. It now predicts a mid-single-digit decline in its benchmark payment rates as a result of the payment changes.
According to a release from America’s Health Insurance Plans (AHIP), a national health insurance trade association, the combined effect of Affordable Care Act (ACA) cuts and the new proposed payment changes will reduce Medicare Advantage payments next year by more than 8 percent, or approximately $11 billion.
The negative 2.2 percent is derived from a combined estimate of the Medicare Advantage growth percentage and the fee-for-service growth percentage. The resulting metric is used to measure the estimated growth in expenditures per Medicare beneficiary and thus helps determine the payment benchmarks for Medicare Advantage plans. The negative growth trend is due to slower growth in fee-for-service per-capita spending.
CMS has invited public comment before releasing final rates on April 1.
Publication Date: Wednesday, February 20, 2013