Dive Brief:
- CMS released 2017 Medicare Advantage payment rates earlier this week and announced the fee-for -service baseline rate, which measures traditional Medicare spending, will increase by 3.1% in 2017.
- Although the growth rate in fee-for-service Medicare is one of the main figures the government uses to calculate the monthly lump sum payments to Medicare Advantage insurers, the rate is subject to variation as more Medicare spending data is analyzed by actuaries.
- The 3.1% rate is good news for Medicare Advantage plans, but other issues such as the new risk-scoring method going into effect next year, in-home visits for Medicare patients, and star ratings for plans that cover people enrolled in Medicare and Medicaid are likely to be addressed.
Dive Insight:
The 2017 Medicare Advantage rates, with all policies and adjustments, will be published Feb. 19, 2016. The final rates take effect after the markets close April 4, 2016.
Almost 33% of all Medicare beneficiaries, more than 17.7 million people, are enrolled in a Medicare Advantage plan. Aetna, Kaiser Permanente, Humana, and UnitedHealth Group carry the most members.
However, several large insurers, including Humana, will no longer participate next year in Medicare Advantage plans that serve those enrolled in Medicare and Medicaid, as reported in Modern Healthcare. The Dual Eligible Special Needs Plans were initiated in 2003 by the Medicare Prescription Drug, Improvement and Modernization Act.
An analysis by the Integrated Care Resource Center reports 16 of these plans will be discontinued by the end of the year. An estimated 46,000 people are in plans set to be cut, with 70% of them offered by Humana. Insurers participating in the plans say by discontinuing them, they are addressing low enrollment and failure to make a profit.