CMS Proposes Medicare Advantage Cuts

CMS has released proposed payment rates for Medicare Advantage plans in calendar year 2015, including a potential 1.9 percent pay cut.

moneyThe proposed reimbursement reduction results from the combined effect of the Medicare Advantage growth percentage and the fee-for-service growth rate, according to CMS. The change is meant to more closely align Medicare Advantage payments with fee-for-service spending for Medicare Parts A and B and improve payment accuracy, according to a news release.

America's Health Insurance Plans has released a statement criticizing the proposed reduction, although the organization is still reviewing the CMS notice to determine its total effect on payment rates.

"The new proposed Medicare Advantage cuts would cause seniors in the program to lose benefits and choices on which they depend," AHIP President and CEO Karen Ignagni said in the statement.

Earlier this month, in anticipation of the proposed Medicare Advantage cuts, AHIP warned Medicare beneficiaries couldn't handle more reductions. AHIP has said Medicare Advantage enrollees experienced benefit cuts of up to $70 per month as well as cost increases due to last year's 6 percent cut. AHIP had estimated CMS would reduce 2015 Medicare Advantage payments by 6 percent as well.

According to AHIP, approximately 28 percent of all Medicare beneficiaries are enrolled in Medicare Advantage, or Medicare Part C, plans, which are private health insurance policies offered as an alternative to traditional Medicare.

Additionally, last week, a bipartisan group of 40 senators sent a letter to CMS asking the agency not to cut Medicare Advantage payments. "Given the impact that payment policies could have on our constituents, we ask that you prioritize beneficiaries' experience and minimize disruption in maintaining payment levels for 2015," the senators wrote.

In order to contain costs, the Patient Protection and Affordable Care Act cuts Medicare Advantage by $200 billion during a 10-year period. Republicans and insurers have opposed the cuts, but many industry experts say the reimbursement reductions haven't had a negative impact so far.

CMS will announce final 2015 Medicare Advantage rates April 7.

More Articles on Medicare Advantage:
Senators Ask CMS Not to Cut Medicare Advantage
Health Insurers Prepare to Fight Medicare Advantage Cuts
5 Observations on Medicare Spending Growth 

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