2021 CMS Rate Proposal For Medicare Advantage Plans

The Centers for Medicare and Medicaid Services (CMS) released a proposed rate increase of less than 1 percent on 2021 baseline payments for insurers managing Medicare Advantage (MA) plans. The proposal pales in comparison to the more than 2.5 percent increase plans saw this year, but the rate is set to finalize in April.

An average increase of 0.93% in federal 2021 MA rate payments came as a bit of a surprise as expectations were based on 2020 rates. Evercore ISI analyst Michael Newshel published a research note ahead of the release, expecting about a 2.5 percent increase, in line with the previous year.

In the proposed rule, the agency zeroed in on lowering drug costs for MA beneficiaries and reworking star ratings. If finalized, CMS is estimating federal savings near $4.4 billion over the next decade, largely attributed to MA and Part D star rating revisions.

A statement on the rule from CMS read, in part:

We expect some savings will also be passed onto beneficiaries in the form of increased benefit offerings and reduced premiums or cost-sharing.

For star ratings, the agency proposed plans to increase measure weights in the patient experience and complaints category, as well as access measures, for MA plans from two to four. CMS cited its dedication to “put patients first” and empowering them as an impetus for the move.

A proposal to allow Part D drug plans to lower out-of-pocket costs on prescription drugs through the creation of a second “preferred” specialty tier was also brought forth by the agency. The new tier would feature a lower cost-sharing than the current specialty tier for drug prices.

CMS is accepting comments on the proposed rule through March 6.

For the proposal fact sheet, visit CMS.

Check out Modern Healthcare for more on the rate increase.

Also, take a look at Reuters for more.