What's Happening?
The Centers for Medicare & Medicaid Services (CMS) has announced proposed payment rates for Medicare Advantage (MA) and Part D for the 2027 plan year. The proposal includes an estimated additional $700 million in payments to MA plans, with a net payment rate increase
of 0.09%, which is essentially flat compared to the 2026 plan year. However, when considering the estimated risk score trend influenced by coding practices and population shifts, the average payment increase is projected to be 2.54%. CMS is also proposing changes to the risk adjustment model used in the MA program, continuing with the current model, version 28, while calibrating it with more recent data from the traditional Medicare program. Notably, CMS plans to exclude diagnoses from unlinked chart review records from risk score calculations starting in 2027.
Why It's Important?
The proposed changes by CMS are significant as they aim to enhance the accuracy and efficiency of Medicare Advantage payments. By maintaining flat rates and updating risk adjustment models, CMS seeks to ensure that payments accurately reflect the health risks of beneficiaries, thereby promoting competition and value creation among providers. This move is crucial for maintaining affordable plan choices and reliable benefits for beneficiaries while safeguarding taxpayer funds from unnecessary spending. The proposal also aligns with changes made under the Inflation Reduction Act, indicating a broader effort to modernize Medicare Advantage and Part D programs.
What's Next?
CMS is seeking feedback on the proposed updates, including measure updates and new measure concepts, as it considers reshaping the annual star ratings calculation. The feedback process will likely involve stakeholders from various sectors, including healthcare providers, insurers, and beneficiary advocacy groups. The outcome of this feedback could influence the final implementation of the proposed changes, potentially affecting how Medicare Advantage plans are structured and evaluated in the future.
