2017 MA Rates Proposed from CMS

Feb 19, 2016

  1. midwestbroker
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    midwestbroker Guru

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    CMS proposes 2017 payment and policy updates for Medicare Health and Drug Plans
    Proposed policies maintain stability of Medicare Advantage program

    The Centers for Medicare & Medicaid Services (CMS) today released proposed changes for the Medicare Advantage and Part D Prescription Drug Programs in 2017 that will, if finalized, provide stable and fair payments to plans, and makes unprecedented improvements to the program for plans that provide high quality care to the most vulnerable enrollees.

    “These proposals continue to keep Medicare Advantage strong and stable and as with this past year, support the provision of high quality, affordable care to seniors and people living with disabilities," said CMS Acting Administrator Andy Slavitt. “In particular, these proposals support investment in dually Medicare-Medicaid eligible individuals and those with complex socioeconomic needs.”

    The net payment impact of the proposed updates would result in a modest increase of 1.35 percent on average for Medicare Advantage plans, although individual plans’ experiences will vary. This moderate growth is consistent with last year’s update and reflects a similar pattern in Medicare fee-for-service. Plans that improve the quality of care they deliver to enrollees can see higher updates and can grow and enhance the benefits they offer to enrollees.

    CMS is also proposing to improve the precision of payments to Medicare Advantage plans that serve vulnerable populations such as dually eligible or low income beneficiaries. CMS proposes to adjust Star Ratings to reflect the socioeconomic and disability status of a plan’s enrollees. In addition, CMS proposes to revise the methodology used to risk adjust payments to plans to more accurately reflect the cost of care for dually eligible beneficiaries.

    Enrollment and quality have grown in Medicare Advantage and Part D since enactment of the Affordable Care Act:

    • Medicare Advantage has reached record high enrollment each year since 2010, a trend continuing in 2016 with a cumulative increase of 50 percent to an all-time high of more than 17.1 million beneficiaries.
    • Nearly 32 percent of Medicare beneficiaries are enrolled in a Medicare Advantage plan.
    • Average Medicare Advantage premiums have fallen by nearly 10 percent from 2010 to 2016.
    • The percentage of Medicare Advantage enrollees in four or five star contracts has almost quadrupled since 2009 to 71 percent.
    • About one-third of prescription drug plan enrollees are in Part D plans with four or more stars, compared to 27 percent of enrollees in such plans in 2009.

    The average number of Medicare plan choices remains consistent in 2016 as compared to 2015, and access to supplemental benefits, such as dental and vision benefits, is growing. The proposed policies in the Advance Notice and Draft Call Letter continue to strengthen and improve the Medicare Advantage program for current and future generations, including the program’s ability to serve Medicare beneficiaries with diverse needs."

    Here is a link to the announcement from CMS:
    https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-02-19.html
     
  2. asher
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    asher Super Genius

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    That's all wonderful but how will my commissions and renewals be impacted
    for 2017. Not a reduction I hope!:skeptical::skeptical:
     
    asher, Feb 19, 2016
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  3. enyce
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    enyce Expert

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    Same question here. :err:
     
    enyce, Feb 22, 2016
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  4. craig_ritter
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    CMS will issue 2017 FMV for MA/PDP commissions on April 4th. Health plans set their brokers commissions starting in May and must finalize by late July. Generally speaking, the changes CMS makes to FMV for commissions follows the increase/decrease in MA reimbursements, so we'll probably see a 1 to 2% increase in MA commissions and a 4 to 6% increase in PDP commissions (just guessing here!)
     
  5. Newby
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    Newby Guru

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    I wonder what they mean by "CMS proposes to adjust Star Ratings to reflect the socioeconomic and disability status of a plan’s enrollees."
     
    Newby, Feb 23, 2016
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  6. craig_ritter
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    Newby, they are looking to provide higher reimbursement for Low Income Subsidy (LIS) and Dual Eligibles (DE) through risk adjustment. They also are looking at the fact that plans with higher proportions of LIS and DE tend to have lower star ratings, so they could potentially normalize for this a bit. It's kind of a double whammy, since reimbursement is on a contract/county level and higher proportions of LIS/DE can cost more in terms of utilization and can result in lower star ratings, so you tend to lose on the revenue and expense side, both.
     
  7. Newby
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    That makes sense. The star rating system doesn't seem too useful anyway. We have to explain to people that they want to make their decision on MAPDs based on if their doctors are in network for the plan not the star rating. Left to their own devices people will just choose the plan with the lowest premium or the highest star rating and forget RX formularies or provider networks. Star ratings make it a little more confusing to the consumer not less in my opinion.
     
    Newby, Feb 23, 2016
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  8. midwestbroker
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    midwestbroker Guru

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    My guessing on commissions is in line with Craig as I see a couple points movement and that is about it.

    As for the star ratings, I agree it can be confusing. CMS uses the same 5 star rating for nursing homes, MA plans and home health providers. I agree there needs to be some education from the agent on star ratings, as just because the plan has a 5 star rating, it does not mean it is the best fit for the client.

    I use cars a lot in my examples, and I have said it is like looking at a sedan that seats 4 because it has a 5 star crash rating, but I have 5 kids, plus two adults means I need a vehicle that seats 7. I am pretty sure it is illegal to put kids in the trunk, so that 5 star rating on that car is great, but not practical for me.

    Hint: This is a great little way to mention to the fact you have kids, or dogs, or any other creature you would have ride in the trunk in the above example.
     
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