2021 Physician Fee Schedule Changes Do Not Account for Impact on Medicare Advantage

The Consolidated Appropriations Act of 2021 included a 3.75% increase in provider payments under the Medicare Physician Fee Schedule for 2021. However, these increased payments are not accounted for in 2021 payments to Medicare Advantage plans, because 2021 payment rates to health plans were set prior to this change, as they were required by statute to be finalized by April of 2020.

This analysis, commissioned by Better Medicare Alliance and conducted by Avalere Health, explains how this unanticipated change in payment policy may result in CMS underpaying Medicare Advantage plans by an average of 0.83%, or $202.4M, in 2021 and could be a significant problem if such changes are made year over year.