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Medicare Advantage: What Payment Changes Did CMS Propose In The 2019 Advance Notice?

by AHIP

March 7, 2018

The Centers for Medicare & Medicaid Services (CMS) released Part I of the 2019 Advance Notice on December 27, 2017 and Part II on February 1, 2018, which lay out the proposed policies governing Medicare Advantage (MA) plan payment for 2019. Stakeholders have 30 days to comment on the Advance Notice prior to CMS issuing a Final Notice on April 2.

Research shows MA plans achieve better health outcomes than the government-run traditional Medicare program, and providers are adopting plan practices that “spill over” and reduce costs in traditional Medicare. In addition, the Medicare Payment Advisory Commission has found that payments to MA plans are roughly equivalent to traditional Medicare costs.

The MA program is very popular and has seen large scale growth throughout the United States. To ensure MA funding levels are consistent with the increase in health care costs, in the 2019 Final Notice CMS should:

  • Ensure plan risk scores are not lowered because of problems with implementing the encounter data system
  • Limit the cut to payments caused by the “normalization” factor by better reflecting trends in traditional Medicare risk scores
  • Adjust the calculation of county benchmark rates
  • Protect against further cuts in payments for retiree plans