- Medicare Advantage plans will see a revenue increase of 8.5% in 2023, a slight increase from the proposed bump of nearly 8%, according to the MA and Part D final rate announcement out Monday.
- The overall increase includes a hike in MA payments of 5%, up from the 4.5% in the proposed rate notice filed in February. The higher raise in the final notice is in line with previous years.
- CMS is not making any change to the risk adjustment calculation, which is meant to compensate plans for treating sicker patients. That's despite calls for an overhaul in the wake of allegations of abuse of the system.
Enrollment in MA plans has continued to grow as startups see an opportunity to elbow into the market dominated by established payers like UnitedHealthcare. In 2021, about 46% of Medicare members were enrolled in an MA plan, and that number is only expected to grow.
Cowen analysts said in a note Monday the increase should allow plans to maintain their margins as they go after members by touting more benefits. "For now, we opine the 5% rate increase should support another year of benefit enhancements and strong enrollment growth," the analysts wrote.
In recent years, plans have boosted their benefits for social determinants of health in particular, including services that help with transportation and meal delivery, in a bid to attract more members.
In a similar effort, CMS asked for feedback on ways to incorporate social determinants into its star ratings for plans. The agency noted that in comments on the proposed rate announcement, stakeholders were supportive of the idea, but "commenters were not in agreement about how to do that." CMS said it will continue to evaluate its options.
The decision not to change the risk score was made to avoid skewed numbers due to COVID-19 treatment in the past two years, CMS said. A concern about risk scores is how plans may be using them to game the system by making patients seem sicker than they actual are in order to get more compensation. The Department of Justice has sued both Anthem and Cigna alleging such practices.
Payer lobby AHIP said it was in favor of the final notice, but was still concerned about separate rulemaking that it called "unworkable." That includes how maximum out-of-pocket costs are calculated for dual eligible special needs plans and Part D point of sale pharmacy price concessions.
AHIP also requested CMS continue COVID-19 special rules for star ratings into 2023.