2015 CMS updates provide increased quality and value for Medicare beneficiaries

The Centers for Medicare & Medicaid Services (CMS) has just released its 2015 proposal for payment and policy updates for Medicare Health and Drug plans. Beneficiaries can get greater protections, value, and care in the Medicare services they receive through the proposed policies. The 2015 Advance Notice and draft Call Letter takes steps to improve payment accuracy for Medicare Advantage (Part C) for 2015.

Since the Affordable Care Act was passed in 2010, Medicare Advantage premiums have fallen by 10% and enrollment has increased by nearly 33%. Currently, more than 15 million Medicare beneficiaries are enrolled in a Medicare Advantage plan. Efforts to reduce overpayments for medical services have corresponded with reduced premiums for customers. No one is certain yet what the 2015 reduction will be, but estimates range from 3%-6%.

Proposed changes in the Advance Notice and draft Call Letter increases value and protections for beneficiaries by providing:

  • Lower out-of-pocket spending
  • Improved notification for beneficiaries regarding changes in Medicare Advantage Plan networks
  • Greater protection for beneficiaries
  • Improved access to preferred cost-sharing
  • Improved coordination of care

Other proposals include closely aligning payments in Medicare Advantage with fee-for-service Medicare (Parts A and B), and the following approaches to improve payment accuracy:

  • Initial estimates of the combined effect of the Medicare Advantage growth percentage and the fee-for-service growth percentage is estimated to be -1.9%.  This is tied to successful initiatives, like the redesigned Medicare statement, undertaken to help curb fraud, waste, and abuse in the Medicare program.
  • Continue to execute changes under the ACA to reduce overpayments and improve quality, by phasing in alignment of MA targets with Medicare fee-for-service (FFS) costs.   The changes reduce overpayments to Medicare Advantage plans, while also basing part of Medicare Advantage payment on plan quality performance.
  • Change in how we estimate the annual trend used to adjust for risk score growth in order to account for the baby boomers entering Medicare, who tend to be younger and healthier than the general Medicare population overall.
  • Continue to adjust for diagnostic coding differences between Medicare Advantage plans and Medicare fee-for-service providers.  In compliance with statutory requirements, CMS proposes applying a 5.16%adjustment for 2015 to MA plan payments, which is a 0.25 percentage point increase over 2014.
  • Continue to calculate risk scores in 2015 using the same procedure in effect in 2014.

To read the CMS press release, click here.