Final payment notice for Medicare Advantage and Part D both good news and disappointing

Rachel Schwartz
Alliance of Community Health Plans
202-785-2247 (office)
202-251-8881 (cell)

For immediate release April 4, 2016:

Today’s announcement of the Final Payment Notice for Medicare Advantage and Part D is a mixture of good news and disappointing news. ACHP is pleased that capitation rates will increase by just over 3 percent for 2017, although with other changes, the increase for the average county will be 0.85 percent. We welcome the transitional year that CMS has provided for the change in the bidding process for employer group waiver plans.

The adoption of a revised risk adjustment model provides welcome benefit for Special Needs Plans (SNP) caring for low-income and disabled individuals and other plans with high enrollment of dually eligible Medicare and Medicaid beneficiaries. We are disappointed that CMS did not reflect concerns, however, about the impact of this change on other MA plans.

We appreciate that CMS has slowed down transition to using encounter data for calculating risk scores, to allow time for improvements to the data system. Finally, we believe that CMS can and should correct the MA benchmark cap, which has limited quality incentive payments to many plans at 4 stars and above.