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CMS Sets 2018 Medicare Advantage Subsidy

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The Centers for Medicare & Medicaid Services said Monday it expects its payments to Medicare Advantage plan issuers to increase an average of 0.45% over 2017 levels in 2018.

CMS put that figure in its final call letter announcement for 2018.

The expected change in the per-enrollee payment is up from an increase of 0.25% included in a draft program proposal for 2018 posted in February, according to a 2018 call letter summary sheet.

(Related on ThinkAdvisor: 10 counties where Medicare Advantage looks like a wimp)

CMS assumes that typical 2018 enrollees will be somewhat older and sicker than 2017 enrollees, giving those enrollees higher average diagnostic intensity codes. The combination of the underlying payment level increase and the increasing intensity in diagnostic codes should increase overall 2018 per-enrollee revenue an average of 2.95%, CMS said.

That’s up from an overall increase of 2.75% in the draft proposal.

The Medicare Part C Medicare Advantage program gives insurers the ability to sell plans that serve as an alternative to traditional Medicare A hospitalization coverage and Medicare Part B physician and outpatient services coverage.

Another program included in the final call letter announcement, the Medicare Part D prescription drug program, gives insurers the ability to sell prescription drug coverage to Medicare enrollees.

Seema Verma, President Donald Trump’s newly confirmed CMS administrator, said in a statement accompanying the call letter announcement that Medicare program managers want to strengthen the Medicare Advantage and Medicare drug plan programs by “supporting flexibility and efficiency.”

“These programs have been successful in allowing innovative approaches that give Medicare enrollees options that best fit their individual health needs,” Verma said.

Although CMS calls the new document a “final call letter,” the true final terms of the Medicare Advantage bidding process could still be subject to change, depending on the reaction of insurers and consumers.

Margaret Murray, the chief executive officer of the Association for Community Affiliated Plans, a group for nonprofit plans, put out a statement saying CMS has done a good job of trying to help member plans serve the low-income Medicare enrollees who also qualify for Medicaid.

Marilyn Tavenner, the president of America’s Health Insurance Plans, who previously was the CMS administrator, said in a statement from AHIP that CMS had made some adjustments in policies.

“We believe more must be done to ensure beneficiaries are well supported in achieving their best health,” Tavenner said. “We look forward to working with the agency to reduce unnecessary regulatory burdens, enhance program flexibility and innovation, and promote delivery system reform and patient engagement.”

Anthem, the biggest insurer still in AHIP, is based in Indianapolis. Before Verma went to work for CMS, she ran a health coverage program consulting firm in Indiana for years.

— Read CMS nominee backs patient choice at Senate hearing on ThinkAdvisor.


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