Medicare Advantage Pay Rates to Rise 1.25% in 2016
Written by Editor   
Friday, April 24, 2015 12:00 AM

Payments to Medicare Advantage plans will increase by an average of 1.25% in 2016, the Centers for Medicare and Medicaid Services (CMS) has announced.  The increase, announced as part of CMS' final notice and call letter for Medicare Advantage in 2016, is a change from the projected decrease of 0.95% announced in the advanced notice and draft call letter issued in February.

The change occurred "largely because the Medicare actuaries recently updated Medicare per capita spending estimates for 2014 and 2015," CMS said, adding that "Medicare per capita spending in 2014, 2015, and 2016 is still expected to be below historical standards."

Sean Cavanaugh, director of the Center for Medicare at CMS, told reporters that 0.1 percentage points of the increase was related to the proposal now being considered in Congress to permanently repeal the sustainable growth rate (SGR) formula for physician reimbursement under Medicare.

"In the past 2 years, the [Secretary of Health and Human Services] instructed the actuaries to assume that the SGR cut in the fee schedule payment would not take effect because the most likely scenario was they would not -- and, in fact, they did not," he said. "This year the secretary expanded on those comments and instructed the actuaries to not only assume the cuts would not take effect but to assume the pending legislation to permanently fix the SGR would take effect."

The draft call letter also proposed stronger enforcement of the requirement that Medicare Advantage plans keep provider directories up-to-date and accurate. "In the final version, CMS clarified some of these expectations for plans and their communication with providers," Cavanaugh noted.