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CMS Updates Medicare Advantage Payment Methodology

The Centers for Medicare & Medicaid Services (CMS) has finalized its payment methodology for Medicare Advantage (MA) plans in calendar year (CY) 2017, including a policy to more accurately pay MA plans that cover vulnerable populations.

As outlined in its MA and Part D rate announcement and final call letter for CY 2017, CMS revised the methodology used to risk adjust payments to MA plans. This more precise risk adjustment will cause payments from CMS to more accurately reflect the cost of care for dually eligible beneficiaries. Additionally, CMS will implement an interim adjustment to the MA star ratings to account for the socioeconomic and disability statuses of a plan’s enrollees.

By making these changes to the risk adjustment methodology, CMS hopes to improve the growth, affordability, benefits, and quality of care for the most vulnerable seniors and people living with disabilities.

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


About the Author

Matt Buechner is the policy and advocacy associate for America's Essential Hospitals.

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