A proposed change in the Medicare Advantage risk-adjustment formula could cut overall program funding by 2.1 percent in 2017, according to America’s Health Insurance Plans (AHIP).
Because the formula would cut payments to plans that cover a high percentage of patients with conditions such as diabetes and congestive heart failure, it would be especially hard on efforts to improve care for people with common chronic conditions, AHIP says.
AHIP talks about those concerns in comments on the recently released draft of the 2017 Medicare Advantage program call letter and draft program standards.
The Medicare Advantage program gives private carriers a chance to sell plans that serve as an alternative to traditional Medicare coverage. The Centers for Medicare & Medicaid Services (CMS) uses a bidding process to get carriers to compete with one another, to try to keep costs as low as possible for the Medicare program and its enrollees.
Negotiations over the call letter, and other program rules and standards, has become a part of the bidding process.
CMS uses the Medicare Advantage risk-adjustment program, which is separate from the Patient Protection and Affordable Care Act (PPACA) risk-adjustment program for commercial health plans, to compensate Medicare Advantage plans that end up covering a high percentage of high-risk enrollees.
CMS says it wants to update its risk-adjustment formula because it leads to underpayments for enrollees with disabilities, and for “dual eligibles.” Dual eligibles are low-income enrollees who are eligible both for Medicare and Medicaid.
“AHIP continues to strongly support changes in CMS policy that ensure Medicare Advantage plans serving beneficiaries with complex needs… are accurately reimbursed for their costs of meeting the needs of these vulnerable populations,” AHIP says.