The Centers for Medicare and Medicaid Services (CMS) finalized its 2024 Medicare Advantage (MA) payment rates, giving MA plans a 3.3% rate increase next year.
The final rate increase is higher than in the proposed rule, which came out in early February. According to CMS, MA plans will see an average payment increase of 3.32% from 2023 to 2024, worth approximately $13.8 billion in increases.
“Medicare should be providing equitable, high-quality affordable care that will be available for our children and grandchildren,” CMS Administrator Chiquita Brooks-LaSure said in a statement. “Paying Medicare Advantage plans more accurately for the care they provide is how we ensure that people enrolled in Medicare Advantage, especially populations with the highest health disparities and people in underserved communities, can continue to access the care they deserve.”
The MA plan payment update comes as the Biden administration is also taking steps to strengthen Medicare for the long term. President Joe Biden’s recently released budget proposal includes increasing taxes for the richest Americans and giving Medicare more power to negotiate drug prices with manufacturers.
Plus, the Medicare Payment Advisory Commission (MedPAC) recently released a new recommendation to tie physician payments to the Medicare Economic Index (MEI)––a move that would adjust payments to inflation. However, the recommendation would tie payments to 50% of the MEI, which many industry groups have agreed is too low.
The administration is also cracking down on overpayments, recovering improper payments made to insurance companies with MA plans. The recovered funds will help ensure the Medicare Trust Fund lives on longer. In addition, CMS is looking to streamline prior authorization, which would ease some burdens on physicians and healthcare providers, as well as cut down on waste and negative patient outcomes.
“The commonsense policies in the Rate Announcement ensure these important programs continue to meet the health care needs of all people with Medicare while improving the quality and long-term stability of the Medicare program,” CMS Deputy Administrator and Director of the Center for Medicare Meena Seshamani, MD, PhD, said in a statement.
The final rule changes the MA and Part D payment methodologies, including technical and clinical updates to the MA risk adjustment model. The changes includes transitioning to the Internal Classification of Diseases (ICD)-10 system, which is the coding classification system used by the healthcare system since 2015. The final risk adjustment model will also reflects revision focus on conditions that are subject to more coding variation, CMS said.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."