CMS and Insurers At Odds Over Medicare Advantage Decision

CMS and Insurers At Odds Over Medicare Advantage Decision the Biden administration and health insurers are at odds about whether Medicare Advantage (MA) contracts will get a pay decrease in the coming year. After accounting for risk adjustment modifications and other considerations, insurer companies and certain politicians claim that the revised 2024 payment regulation amounts to a nearly 2.3% decrease in MA plans. The CMS (Centers for Medicare & Medicaid Services)  has responded, saying that just isn’t the case.

 This dispute arises in the context of greater regulatory scrutiny for the program.

The conflict comes after CMS issued a fresh regulation last month that changes how the agency performs risk adjustment data validation (RADV), which compares billing information from a sample of providers to customers’ medical records to verify they match. The purpose of the new regulation is to reduce the growth of MA plan overpayments observed by agencies such as the Medicare Payment Advisory Committee.

“We think it is important not to cherry-pick the numbers,” stated CMS Administrator Chiquita Brooks-LaSure. “When we look at all the elements, we do see a net positive so an increase of little over 1%.”

The payouts to MA and Part D programs for the 2024 coverage year are included in the planned advance notice that was posted a few weeks ago. The proposed rule outlines important changes to risk adjustment as well as the payment rules and modifications to MA capitation rates for the next year.

A 1.03% hike was projected by CMS when the regulation was issued on February 1. To arrive at this conclusion, the government agency accounted for a fall in payouts as a result of risk adjustment reforms. The insurance sector has fought back since the rule was published, saying that if the regulation is approved, it will actually result in a 2.27% drop in plans.

Better Medicare Alliance (BMA) President Mary Beth Donahue remarked that the rule would increase costs and eliminate access for 30 million American elders who depend on Medicare Advantage, an essential aspect of Medicare.

The American Health Insurance Plans (AHIP) cited further issues, including a decrease of 1.24% in quality payouts for MA and Part D in 2024. As a response to the financial strains brought on by the COVID-19 epidemic, the agency has phased out some of the flexibilities that allowed plans to earn higher star ratings.

It is anticipated that the county benchmarks utilized in the setting of the rates charged for MA plans will increase by nearly 2.10% in 2024. This is another area of change. This is a growth rate less than half of what is expected for this year, which is 4.88%, and it is far below the estimated growth for per-entrant Medicare expenses of 5%.

AHIP also questioned CMS’ claims that the reduction would be compensated for by risk scores and investment evaluation payments. According to the organization, CMS has not revealed how they arrive at their estimates for this coding pattern. As a result, the CMS coding trend estimate cannot be verified.

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