Medicare Advantage Payments Will Stay Level in 2011

Janice Simmons, April 7, 2010

Medicare beneficiaries enrolled in Medicare Advantage and Medicare prescription drug plans are being given the opportunity to more easily compare plans in 2011 under a final regulation issued Tuesday by the Centers for Medicare and Medicaid Services (CMS).

CMS is requiring Medicare Advantage and prescription drug plan sponsors to have "meaningful differences" explained between their product offerings for a Medicare Advantage organization or prescription drug plan sponsor in relation to: premiums, beneficiary out of pocket costs, plan types, and formulary offerings.

CMS said the final rule is consistent with cost sharing protections made in the healthcare reform bill by limiting cost sharing for three Medicare services to no higher than the fee for service amount.

CMS also said, based in part from public input, that it will initially establish cost sharing protection by offering thresholds for Parts A and B services for Medicare Advantage enrollees. In public comments, several key areas had been identified as problematic for sicker beneficiaries, such as inpatient catastrophic days, inpatient short stay days, inpatient mental health days, and single nursing facility days.

"This final Medicare drug and health plan rule strengthens our oversight and adds protections for people with Medicare," said Jonathan Blum, CMS' acting director of the Centers for Medicare Management and Center for Drug and Health Plan Choice, in a statement. "Relying on input and feedback from beneficiaries, plans and other stakeholders, we are able to ensure that all the plan offerings for next year have meaningful differences in how they are designed and meet Medicare's quality standards."

The CMS action comes on the heels of another announcement on Monday that the capitation rates for Medicare Advantage plans in 2011 will be the same amounts they were in 2010—as set last month through the approval of the healthcare reconciliation legislation by Congress that was signed into law by President Obama.

CMS said it intends to conduct further rulemaking to add additional cost sharing services for future plan years. The final regulation will appear in the April 15 Federal Register.

Janice Simmons Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at
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