CMS Lessens Pay Cuts to Medicare Advantage Plans in Final Call Letter
Thursday, April 10, 2014
by: VNAA Policy Team

Section: Public Policy and Advocacy

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On April 7, the Centers for Medicare and Medicaid Services (CMS) announced it will back off proposed pay cuts to Medicare Advantage (MA) plans. CMS changed several aspects of the final call letter from its earlier proposal, including a decision to factor in home risk assessments which was originally in that proposed policy for 2015 to exclude, for payment purposes, diagnoses identified during a home visit that are not confirmed by a subsequent clinical encounter.

MA enrollment begins Oct. 15. It is important to note that Medicare sets reimbursement by county, so the effect on beneficiaries will vary. MA and drug plan bids are due in June.

In a press release CMS states, "Since the Affordable Care Act passed in 2010, Medicare Advantage premiums have fallen by 10 percent and enrollment has increased by 38 percent to an all-time high of more than 15 million beneficiaries. Today, nearly 30 percent of Medicare beneficiaries are enrolled in a Medicare Advantage plan."

The key changes and updates finalized in the rate announcement and final call letter include:

  • Lower out-of-pocket drug spending;
  • Greater protection for beneficiaries;
  • Increased protections for beneficiaries affected by changes in Medicare Advantage plan networks;
  • Payments to Medicare Advantage plans;
  • Delayed implementation of new Part D Risk Adjustment Model;
  • Not implementing some proposed changes to the star ratings; and
  • Not implementing the proposal to require additional coverage in the gap for generic and brand drugs in Enhanced Alternative plan.

To view the final call letter click here.

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