CMS Proposes Medicare Advantage Payment Cut of At Least 1.9 Percent

Christopher Cheney, February 24, 2014

The proposed 2015 payment rate cut to Medicare Advantage health plans is less than expected and less than the reduction this year, but insurers and their allies in Congress are expressing displeasure with the prospect of a second consecutive haircut.

The Centers for Medicare & Medicaid Services is proposing a Medicare Advantage pay cut of at least 1.9 percent despite urging from lawmakers and insurers to maintain current payment rates in 2015.

The payment cut would affect Medicare Advantage health plans in 2015.


See Also: MA Payment Rates for 2015 Cloaked in Uncertainty


"Preliminary estimate of the combined effect of the Medicare Advantage growth percentage and the fee-for-service growth percentage is estimated to be -1.9 percent," CMS said Friday. The agency released a 148-page document detailing proposed MA payment and other changes in the fiscal year starting in October. "This historically low growth in Medicare per-capita spending is tied, in part, to successful initiatives undertaken to promote value over volume and help curb fraud, waste, and abuse in the Medicare fee-for-service program in recent years."

Supporters of the MA program, including some of the country's leading insurers, say a second straight year of cuts would impede progress toward a value-based healthcare system and would lead to higher out-of-pocket expenses for seniors.

"The proposed funding cuts threaten the stability of the Medicare Advantage program, which has proven to provide high levels of satisfaction and quality of care for millions of beneficiaries," Aetna officials said in a statement provided to HealthLeaders Media Thursday. "Research shows that these plans outperform Medicare fee-for-service in 9 out of 11 clinical quality measures and have high levels of member satisfaction."

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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