2018 Final Rate Notice: Stability for Medicare Advantage

Allyson Y. Schwartz

Last month, the Centers for Medicare & Medicaid Services (CMS) released the 2018 Final Rate Notice and Call Letter. This annual Rate Notice is awaited with keen attention by every stakeholder who cares about Medicare Advantage because it indicates payment and policy changes for the following year. Plans, providers, community partners, and beneficiaries anticipate the Final Notice because they know it could mean stability or significant changes that impact the payments and benefits they depend on.

This year the Final Notice was encouraging due to positive responses on a number of issues, and the recognition of the high value care offered by Medicare Advantage to millions of beneficiaries. CMS Administrator Seema Verma indicated her recognition of Medicare Advantage’s innovativapproach to care delivery and drive toward value-based coverage.

In addition, Administrator Verma indicated her interest in strengthening Medicare Advantage by calling for ideas to reduce regulatory burdens and expand opportunities to grow Medicare Advantage. Ideas were offered by Better Medicare Alliance (BMA) and many others to ensure Medicare Advantage continues to provide quality health care to millions of beneficiaries.

As CMS reviews the submissions to their request for information, the 2018 Rate Notice took several actions that responded to issues of concern to BMA and our 84 ally organizations.

1. CMS decided to scale back the move toward the use of encounter data rather than claims data as a diagnosis source from the anticipated blend of 50%-50%. CMS decided to dial back encounter data to 15%, due to the concerns regarding the accuracy of encounter data and the burden on clinicians.
2. CMS provided for stable payments for 2018 by keeping the annual cuts in the coding intensity adjustment to the statutory minimum of minus 0.25%. CMS agreed to freeze payment for Employer Group Waiver Plans (EGWPs) at the 2017 payment methodology to prevent negative impacts on retirees who rely on Medicare Advantage through a former employer, union, state or local government entity.
3. While CMS did not act to lift the benchmark cap, which limit access to supplemental benefits for beneficiaries in high quality plans in certain counties, CMS did indicate that they agree this should be done, but action requires legislative authority.

BMA provided comments to CMS on behalf of our over 80 ally organizations and hundreds of thousands of beneficiaries. Over 130,000 senior advocates urged CMS to take action to protect Medicare Advantage through an online March on Washington. They also wrote letters and postcards asking for the Benchmark cap to be lifted either by regulation or legislation. Their advocacy for the care they value is much appreciated and BMA will continue to work with all the stakeholders in Medicare Advantage to be sure their voices are heard by policymakers in Washington.

As we look towards 2018 open enrollment in October, we appreciate CMS’s decisions to offer stability, adequate payment, and accurate risk adjustment that enables Medicare Advantage to offer quality, affordable, innovative coverage and care. We look forward to working with the new Administration and Congress to strengthen the coverage and innovative care offered under Medicare Advantage.

For more details on the 2018 Rate Notice, please see more information here, and sign up for BMA’s Policy Alerts, here.