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CMS Finalizes 2018 MA and Part D Payment Policies

In a final rate announcement and call letter for 2018, the Centers for Medicare & Medicaid Services (CMS) outlines payment rates and methodology changes for Medicare Advantage (MA) and Part D plans.

CMS estimates that MA organization (MAO) payment rates will increase by 0.45 percent on average in 2018, with an expected average revenue increase of 2.95 percent when accounting for coding changes. CMS also states that in 2018, it will continue to use a blend of data sources for calculating a patient’s risk score. The agency adjusts beneficiary-level payments to MAOs based on a beneficiary’s risk score, which is determined using diagnostic data. In 2018, CMS will calculate risk scores using a blend of 15 percent encounter data and 85 percent data from the Risk Adjustment Processing System, instead of 25 percent and 75 percent as originally proposed.

The agency also indicates that it will continue using the risk adjustment methodology it has been using in 2017 for calculating MAO star ratings. The methodology adjusts for socioeconomic factors and disability status of a MAO’s enrollees in calculating its star rating, which in turn determines whether the MAO receives a payment bonus.

Moreover, CMS is finalizing changes to existing Part D prescription drug plan policies that will be more effective at targeting the opioid epidemic. This includes tightening prospective and retrospective checks on opioid overuse. CMS is finalizing a change to the drug utilization review criteria to more closely mirror the Centers for Disease Control and Prevention guidelines. The agency also finalizes changes to Part D sponsors’ internal review processes that will assist sponsors in better identifying opioid overuse.

Finally, the rate announcement and call letter includes a Request for Information seeking comments on changes to Medicare Advantage and Part D that could increase benefit flexibility and efficiency, and lead to more affordable choices for beneficiaries. These suggestions may be for changes that are regulatory, subregulatory, or procedural in nature. CMS is accepting comments on the Request for Information until April 24.

Contact Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Shahid Zaman is a senior policy analyst at America's Essential Hospitals.

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