March 5, 2015

CMS Issues Medicare Advantage Advance Notice for 2016 Policies and Rates

The Centers for Medicare & Medicaid Services (CMS) has issued proposed changes for the 2016 rate year for the Medicare Advantage program. The Advance Rate Notice (ARN) Select Announcements and Documents proposes changes in payments that will affect plans differently depending on a number of factors. On average, when combined with expected growth in plan risk scores due to coding, the expected revenue change would be a positive growth of 1.05 percent. Plans that have shown quality improvement and have demonstrated a focus on customer satisfaction would see additional growth. It should be noted that CMS indicates in the ARN that plan payment levels will continue to be somewhat higher than the equivalent payments in fee-for-service Medicare.  

The proposed policies would also provide enrollees with more information to make informed decisions about their care and coverage. CMS proposes steps to ensure that plans maintain accurate provider directories and make those directories widely available. In 2016, CMS proposes to calculate risk scores under the risk adjustment model based entirely on the 2014 CMS-HCC (Hierarchical Condition Categories) model. For 2015, CMS used a blend of the 2013 and 2014 CMS-HCC models.

The final notice for 2016 will be issued April 6, 2015. For more information, contact  Kathy Reep , vice president of financial services, at (407) 841-6230.