Insurers await Trump admin's Medicare Advantage payment rates

Insurers are closely watching what the new administration will do in releasing its first payment rate notice for Medicare Advantage plans this week.

The Centers for Medicare and Medicaid Services is expected to release the advance rate notice for Medicare Advantage plans on Feb. 2. Stakeholders will have 30 days to comment prior to CMS issuing a final rate notice on April 3.

Beginning in 2017, CMS changed how employer group waiver plans would be paid, resulting in a 1.25 percent reduction to these plans, according to information from America's Health Insurance Plans. CMS announced its intention last year to implement a similar reduction for 2018.

Consultant Oliver Wyman has estimated that CMS's policy to increase the use of encounter data for calculating plan risk scores in 2017 could reduce overall funding to the MA program by up to 1.5 percent, AHIP said.

[Also: Medicare Advantage as an advanced payment model is in MACRA's distant future]

CMS has large discretion over certain payment policies and is likely to address several issues of critical importance to MA plans, according to AHIP.

"This will be one of the first healthcare actions administrators will take since the presidential inauguration, and we are hopeful that it will reflect our president's strong support for the Medicare program," said Kristine Grow, AHIP's senior vice president of Communications.

Republicans have signaled their support for Medicare Advantage plans by private payers that offer an alternative to traditional Medicare.

Some Republicans, such as House Speaker Paul Ryan, R-Wisconsin, support a voucher program for Medicare, which would end the open-ended government entitlement program. Senior citizens would receive a voucher to buy insurance.

This week, 65 members Senators signed a bipartisan letter expressing their support for Medicare Advantage. The move was led by Senators Mike Crapo, R-Idaho and Bill Nelson, D- Florida.

AHIP thanked the Senators in a letter sent to Acting Administrator Patrick Conway at CMS.

"Medicare Advantage is a great example of a public-private health program that works – improving affordability and healthcare quality for seniors across the nation," Marilyn Tavenner, president and CEO of AHIP, said in the letter.

As of January 2017, over 18.3 million beneficiaries, or 32 percent of the total Medicare program, are enrolled in Medicare Advantage. The MA program grew by 7 percent in the past 12 months, according to AHIP.

Twitter: @SusanJMorse