CMS To Increase Rather Than Cut Medicare Advantage

By  //  April 5, 2013

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Policy Change Boon To 40,000 Brevard Seniors

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Early this week the Centers for Medicare and Medicaid Services (CMS) announced that it was making an about face on the previously reported plans to cut Medicare Advantage (MA) reimbursement rates by 2.2 percent.

CMS recalculates and increases MA funding rather than decreasing as prescribed in Obamacare.

Based on what CMS administrators say is a change in the method of calculating reimbursement rates, instead of cutting payments for Medicare Advantage plans, it will increase them by 3.3 percent.

An editorial in the Wall Street Journal  excerpted in on March 21 cautioned the Obama administration against implementing the Medicare Advantage (MA) budget cuts that are part of the Patient Protection and Affordable Care Act (PPACA). The $306 billion originally slated to be taken out of MA, a popular private insurance alternative to traditional Medicare that offers more flexibility than the standard federal Medicare plan, represented a very painful and significant cut of a program that nearly one in three seniors use to enhance and customize their coverage plans.

Jonathan Blum, CMS Deputy Administrator

The insurance industry and more than 100 members of Congress put the pressure on CMS, arguing that the methodology prescribed in the PPACA was faulty. Jonathan Blum, CMS’ acting principal deputy administrator, said in a statement, “The policies announced today further the agency’s goal of improving payment accuracy in all our programs, while at the same time ensuring program stability and preserving beneficiary choice.”

Health insurers had cautioned that, because of the projected “Obamacare” MA funding cuts, the amount it pays per person for the popular coverage could fall more than 2 percent in 2014, and seniors enrolled in MA plans were highly likely to see less choice, lower benefits and higher premiums.

In an article titled “Medicare Advantage Insurers Win Round,” the Wall Street Journal  quotes America’s Health Insurance Plans President and Chief Executive Karen Ignagni, who said, “CMS has taken an important step to help stabilize Medicare Advantage at a time when the program is facing significant challenges.”

The CMS turn-around is a boon for the 3,000 private health insurance plans that offer MA coverage and to the nearly 12 million beneficiaries they serve, approximately 40,00 of which live in Brevard County.