The Centers for Medicare and Medicaid Services introduced a revamp of the system used to pay Medicare Advantage plans on Friday.
CMS initiatives that medical health insurance firms protecting Medicare Advantage enrollees will see a 3.32% internet improve in income from this system in 2024, increased than the 1% projected in a draft version of the rate notice because of a three-year phase-in risk-adjustment program modifications. Insurers characterised the sooner iteration of the coverage as a blow to the more and more standard program that may drive them to cut back advantages.
The medical health insurance business’s main objection is CMS’ strategy to the danger adjustment program, which carriers use to measure and report members’ well being standing to the company. Insurers that cowl sicker sufferers obtain increased funds. Critics say this creates an incentive for Medicare Advantage plans to magnify their policyholders’ well being situations and log as many threat codes as doable to inflate fee.
CMS will remove greater than 2,200 threat codes it contends are most chargeable for upcoding.
Medicare Advantage insurers generated an estimated $17 billion in overpayments in 2021, in response to the newest information from the Medicare Payment Advisory Commission, which makes coverage suggestions to Congress. CMS introduced final month it might recoup $4.7 billion over 10 years from Medicare Advantage insurers the company concluded had been overpaid. CMS additionally lowered the benchmark fee Medicare Advantage insurers obtain by ending fee for oblique medical training bills.
Despite CMS describing the 2024 charges as a internet improve over this yr, the insurance coverage business sees issues in a different way. When mixed with the results of a separate transfer to make star rating bonuses harder to earn, Medicare Advantage carriers face a internet discount in funds subsequent yr, in response to the business. CMS is tightening the star scores program after a record number of insurers received bonuses in the course of the COVID-19 pandemic final yr, a development that reversed this year.
This is a growing story. Please test again for updates.