CMS proposes 1.35% increase on 2017 Medicare Advantage plans

The Centers for Medicare and Medicaid Services on Friday released proposed changes for the Medicare Advantage and Part D prescription drug programs for 2017, including a 1.35 percent increase in the net payment rate for Medicare Advantage, CMS said.

This is an average rate for Medicare Advantage plans, and individual plans' experiences will vary, CMS said.

The expected average increase in insurers' revenue is estimated at 3.55 percent when other risk factors are considered, according to CMS.

America's Health Insurance Plans, which has lobbied to keep current rates, released a statement saying it was continuing to review the notice's impact.

"More than 360 members of Congress and 2 million seniors in the Coalition for Medicare Choices urged CMS to protect Medicare Advantage from any further cuts," said AHIP President and CEO Marilyn Tavenner. "While we are in the process of carefully reviewing all of these provisions, we will be looking closely at any proposals that would undermine health plans' care coordination and disease management programs, especially for low-income individuals. It's critically important that the agency finalize policies that ensure the long-term stability and continued growth of the program for millions of beneficiaries who depend on Medicare Advantage for their coverage."  

CMS said. "Plans that improve the quality of care they deliver to enrollees can see higher updates and can grow and enhance the benefits they offer to enrollees."

[Also: CMS, America's Health Insurance Plans set unified healthcare quality measures]

Additionally, CMS said it wants to improve the precision of payments to Medicare Advantage plans that serve vulnerable populations, such as dually eligible or low income beneficiaries, by adjusting star ratings to reflect the enrollee's socioeconomic and/or disability status.

The percentage of Medicare Advantage enrollees in four- or five-star contracts has almost quadrupled since 2009 to 71 percent.

About one-third of prescription drug plan enrollees are in Part D plans with four or more stars, compared to 27 percent of enrollees in such plans in 2009, CMS said.

CMS is also looking to revise how they risk adjust payments to plans, to more accurately reflect the cost of care for dually eligible beneficiaries.

Enrollment and quality have grown in Medicare Advantage and Part D since enactment of the Affordable Care Act, CMS said. Medicare Advantage has reached record high enrollment each year since 2010, a trend continuing in 2016 with a cumulative increase of 50 percent.

[Also: $7.7 billion in reinsurance payments headed to insurers for 2015 enrollment, CMS says]

More than 17 million beneficiaries are enrolled, representing nearly 32 percent of all Medicare beneficiaries.

Average Medicare Advantage premiums have fallen by nearly 10 percent from 2010 to 2016, CMS said.

If finalized, CMS said, the rules will provide stable and fair payments to plans, and make unprecedented improvements to the program for plans that provide high quality care to the most vulnerable enrollees.

"These proposals continue to keep Medicare Advantage strong and stable and as with this past year, support the provision of high quality, affordable care to seniors and people living with disabilities," said CMS Acting Administrator Andy Slavitt. "In particular, these proposals support investment in dually Medicare-Medicaid eligible individuals and those with complex socioeconomic needs."

[Also: Centers for Medicare and Medicaid Services to release preliminary Medicare Advantage payment plan]

Friday's proposed rate notice kicks off 45 days of feedback before the final 2017 rates are released on April 4.

Twitter: @SusanJMorse