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Medicare Advantage Payment Primer: What Happened in the Final Rate Notice for 2017?


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Published on Apr 19, 2016

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Key Takeaways

  • Medicare Advantage plans provide high-quality health care to over 17 million enrollees. These plans address the unique needs of low-income and other vulnerable individuals. Medicare Advantage is the model for delivery system reforms across the program. Plans reduce costs while driving innovations that deliver better quality care and lower traditional Medicare spending.
  • On April 4, CMS issued the 2017 Final Rate Notice and Call Letter, which implement the Agency’s payment policies for the Medicare Advantage program.
  • These payment policies include substantial changes to the Medicare Advantage payment system that will affect the stability of the program for beneficiaries.


The Centers for Medicare & Medicaid Services (CMS) released the Announcement of Calendar Year (CY) 2017 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies (also known as the Final Rate Notice) and Final Call Letter on April 4, 2016. These documents include the Agency’s final payment policies for 2017.

The Final Rate Notice includes significant changes to the payment policies proposed in the 45-Day Notice (see chart below). At the same time, CMS announced the 2017 county rates that will serve as the basis for Medicare Advantage bids due Monday, June 6, 2016. These bids include each plan’s proposed benefit package and service area for 2017. In late September, CMS will release the 2017 Medicare Advantage Landscape files, providing information on each plan in advance of the Annual Election Period (October 15 – December 7) during which Medicare beneficiaries may join or switch their Medicare Advantage plan.