MICHAEL BRADY February 05, 2020 05:30 PM
The CMS on Wednesday proposed increasing the
baseline Medicare Advantage payment rates for 2021 by 0.93%, well below the
2.53% rate increase that plans got this year.
The agency also proposed new steps to reduce
out-of-pocket drug costs for Part D beneficiaries, promote generic drug usage
and allow enrollees to know more about their prescription drug costs in
advance.
The rate announcement is part two of the 2021
Medicare Advantage Advance Notice. Last month, the CMS said that it wanted to
use more encounter data to decide federal payments to Advantage plans. The
agency is increasingly using this data to calculate patient risks scores, which
it uses to increase or decrease payments to insurers.
But insurers have complained that encounter data
is unreliable and makes their patients look healthier than they are, leading to
lower federal payments to Advantage plans.
Congress repealed the health insurance tax in
December. The tax was supposed to help pay for the Affordable Care Act, but it
was only in effect for 2018 and 2020 thanks to heavy lobbying from the
insurance industry. Analysts say that the repeal will lead to smaller premium
increases and more benefits for Advantage plans, and boost payer profits
because insurers won't have to pay the tax or pass it onto consumers.
Flat premiums and enhanced supplemental benefits
could boost Advantage plan enrollment, an important policy goal for the Trump
administration. Roughly one-third of Medicare enrollees— about 22 million
people—participate in Medicare Advantage.
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