CMS proposes small bump in MA payments, sweeping risk adjustment changes

CMS is expecting a small revenue bump of 1.03 percent on average for Medicare Advantage and Part D plans in 2024 as part of a slate of potential risk adjustment and star ratings changes that has some industry leaders concerned. 

In an advance notice published Feb. 1, the agency proposed a rate increase of 2.09 percent for MA and Part D plans next year, largely driven by increases in fee-for-service costs, and a MA risk score trend of 3.3 percent. 

The agency also signaled a 3.12 percent decline in payments based on proposed changes to the risk adjustment model, and a 1.24 percent decline in payments based on changes to the star ratings system — 2023 star ratings will impact quality bonus payments in 2024.

In addition, CMS proposed shifting MA's diagnosis coding from ICD-9 to ICD-10 in 2024 — the latter has been used since 2015 and by more physicians. 

CMS said these changes will "keep the model up to date and improve payment accuracy." 

The proposed rule builds on a risk adjustment rule finalized by CMS Jan. 30 that could leave Medicare Advantage plans on the hook for up to $4.7 billion in repayments to the federal government. 

Matt Eyles, president and CEO of AHIP, said the agency should not finalize policies that could increase costs for members. 

"We are concerned with the potential adverse impact of the rate notice on seniors and people with disabilities, especially when taken together with the final risk adjustment data validation  rule and other policy changes proposed for next year," Mr. Eyles said. 

“If finalized, this proposal to cut Medicare Advantage by 2.3% would raise costs and cut benefits for 30 million American seniors who rely on Medicare Advantage, a vital part of Medicare. We urge the agency to issue final policies that will keep the promise of stability for 30 million Medicare beneficiaries,” Mary Beth Donahue, president and CEO of the Better Medicare Alliance, said.

The advance notice is open for public comment until March 3. The final ruling will be published by April 3, CMS said. 

See the full advance notice here. 

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