CMS Forecasts Medicare Advantage Pay Rate Increase

Christopher Cheney, April 8, 2014

Federal officials unexpectedly announced a projected 0.4% increase in the 2015 payment rate for Medicare Advantage health plans. A cut had been proposed in February.

The Centers for Medicare & Medicaid Services caught insurers off guard Monday by announcing that the average 2015 Medicare Advantage payment rate for insurers will increase 0.4 percent.

The net positive MA payment rate change from the current year to 2015 is at odds with the 5.9 percent payment rate cut insurers had been anticipating for weeks.

Medicare Advantage Program Standards Tightening

During Monday afternoon's conference call, Jonathan Blum, CMS's principal deputy administrator, defended the agency's accounting of the 2015 MA payment rate. "CMS has a very good track record," he said. "We've been pretty spot-on over the past four years on predicting the markets."

Blum said payment rates for specific MA health plans will vary depending on factors such as geography and bonus payments from the MA star ratings program for quality. He set a confident tone throughout the conference call, saying "we're very confident we will see a very strong program go forward for 2015."  

In a statement released Monday night, America's Health Plan of America President and CEO Karen Ignagni said the trade association remained concerned that its members risked MA payment cuts next year.

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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