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- Kristina on What Sequestration Could Mean to Medicare Advantage Claims Payment
- Curt Black on What Sequestration Could Mean to Medicare Advantage Claims Payment
- Margaret on What Sequestration Could Mean to Medicare Advantage Claims Payment
- Jane Wall Medicare Health Benefits Inc on Strange Bedfellows Come to Medicare Advantage’s Rescue
- Barb Housewright on What Happens to Medicare/Medicaid If There’s a Government Shutdown?
Topic: Risk Adjustment
The Senate Finance Committee held a hearing on Medicare yesterday and received testimony by CMS Medicare chief Jon Blum. Almost a week after the shocking 45-day Notice for Medicare Advantage (MA) and Part D was released, Blum offered little in the way of good news on the 2014 rates.
Health plans and other stakeholders in Medicare Advantage and Part D can be assured of one thing by President Obama’s reelection: that the claws will come out at the Centers for Medicare and Medicaid Services (CMS) in his second term.
The January 1 legislation to fix the fiscal cliff postpones the scheduled 27 percent Medicare physician fee schedule cut under the Sustainable Growth Rate formula for one year. In order to pay for the doc fix, there are a number of payment reductions to Medicare fee for service providers, especially reductions in hospital and ESRD payments, and an extension of the DME competitive bidding program to diabetes test strips purchased at retail pharmacies. The Medicare Advantage (MA) program also takes a hit. The legislation saves $2.5 billion over ten years by adjusting the MA risk adjustment methodology to increase the coding intensity adjustment factor for 2014 from 1.3 percentage points to 1.5 percentage points and to increase the adjustment factor for 2019 and subsequent years from 5.7 percent to 5.9 percent. The coding intensity adjustment is intended to reflect different coding patterns between Medicare Advantage plans and FFS providers.
Two new Health Affairs studies this month brought further evidence that Medicare Advantage (MA) is crushing traditional fee-for-service Medicare in quality, and that the world’s largest experiment in risk adjustment is working in MA.
Medicare Advantage and Part D have for years been the world’s largest experiments in paying insurers more for the care of sick members while paying less for healthier members, or risk adjustment. Some two dozen states now risk-adjust Medicaid payments to health plans, and the hundreds of Accountable Care Organizations (ACOs) launching this year and next are risk-adjusted as well. Now that the election has been decided, we know that health plans operating in the insurance exchanges launching in 2014 will also be risk-adjusted based on a similar methodology to that used in MA and Part D. It’s the new core capability for health insurers in the post-reform world, and it’s examined closely by my two top experts, Bill MacBain and Dr. Jack McCallum, in this month’s Managed Healthcare Executive magazine here.