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Medicare Advantage revenue expected to increase 1.59 percent under proposed rate changes

For the first time, MA plans may lower cost sharing for drugs such as Naloxone, to treat opioid overdoses.

Susan Morse, Managing Editor

Medicare Advantage payment rates for 2020 are expected to increase revenue by 1.59 percent, the Centers for Medicare and Medicaid Services said Wednesday, in releasing the second half of proposed MA and Part D payment and policy updates.

This expected average change in revenue is smaller than the 1.84 percent of 2019.

It does not include an adjustment for the underlying coding trend that is expected to increase risk scores, on average, by 3.3 percent in 2020. Last year, risk scores were 3.1 percent.

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America's Health Insurance Plans said it would continue to review the advance rate notice and would participate in the comment period.


Demetrios Kouzoukas, CMS principal deputy administrator for Medicare, did not give specifics on how the risk scores were calculated, but said the analysis is based on the data collected and risk scores reflect diagnoses.

Risk scores, and the MA growth percentage and Medicare fee-for-service growth percentage, are key factors in determining MA rates and revenue.

The proposed changes continue the agency's efforts to maximize competition among Medicare Advantage and Part D plans, CMS said.

CMS is also encouraging Medicare Advantage plans to take advantage of new flexibilities to offer targeted benefits and cost sharing reductions for patients with chronic pain or who are undergoing addiction treatment.

CMS is encouraging plans to lower cost sharing for drugs such as Naloxone, to treat opioid overdoses.

CMS' overutilization policies have resulted in a 14 percent decrease in the share of Part D beneficiaries using opioids between 2010 and 2017. This is 36.3 percent to 31.3 percent, with the largest decrease from 2016 to 2017.

Medicare Advantage plans will have greater flexibility to offer chronically ill patients a broader range of supplemental benefits that are tailored to their specific needs, such as providing home-delivered meals or transportation for non-medical needs.


MA plans historically have been limited to providing health- related benefits, uniformly to all enrollees. The proposed changes allow chronically-ill enrollees to access other types of benefits and to lower beneficiary cost sharing specific to a chronic illness.

On December 20, 2018, CMS released proposed changes to the Part C risk adjustment model. The original comment deadline of February 19 was extended to March 1.

All comments on the advance notices, including Part I, and draft call letter, must be submitted by March 1. The final 2020 rate announcement will be published by Monday, April 1.

Medicare Advantage remains a popular choice among beneficiaries and has high satisfaction ratings. Average Medicare Advantage and Part D premiums are at their lowest in three years and plan choices have increased, said CMS, which has touted the benefits of the private Medicare plans.


"Medicare Advantage enrollment is at an all-time high as more and more seniors are choosing to enroll in private Medicare health and drug plans, and we need to maximize competition by providing plans the flexibility to meet patients' needs," said CMS Administrator Seema Verma.

"While payments to Medicare Advantage plans on average are equivalent to costs for traditional Medicare, research shows Medicare Advantage is more efficient, produces better outcomes, and has a much higher level of satisfaction among seniors," said Matt Eyles, AHIP president and CEO following the release of the 2020 Medicare Advantage proposed payment rate notice. "That's why last year 363 members of Congress – Republicans and Democrats alike – signed onto a letter to show their strong support for Medicare Advantage. We appreciate the ongoing bipartisan commitment from both Congress and the Administration to protect the Medicare Advantage program – ensuring its long-term stability, so that it can continue to improve seniors' access to quality, affordable healthcare that meets their individual needs. Their support is a key reason why, in 2019, average Medicare Advantage premiums are projected to decrease by 6 percent and more than 91 percent of Medicare enrollees will have access to at least ten Medicare Advantage plans."

Twitter: @SusanJMorse

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