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CMS Proposes 2018 Medicare Advantage Payment Policies

In a proposed advance notice and draft call letter for 2018, the Centers for Medicare & Medicaid Services (CMS) outlines expected payment rates and methodology changes for Medicare Advantage (MA) and Part D.

CMS projects that Medicare Advantage organization (MAO) payment rates will increase by 0.25 percent in 2018, with an expected average revenue increase of 2.75 percent when accounting for coding changes.

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

Further, to better meet the agency’s goal of decreasing health disparities in vulnerable populations, the agency is seeking comment from MAOs on their experiences in providing culturally and linguistically appropriate services to vulnerable enrollees. Specifically, CMS would like to hear from MAOs on the types of enrollee data they collect and use to reduce disparities.

Meanwhile, CMS proposes refinements to existing Part D prescription drug plan policies that will be more effective at targeting the opioid epidemic. The agency is proposing changes to its drug utilization review criteria to more closely mirror Centers for Disease Control and Prevention guidelines. CMS also proposes changes to Part D sponsors’ internal review processes that will help sponsors identify opioid overuse.

CMS is accepting comments on its proposals until March 3 and expects to publish a final advance notice and call letter on April 3.

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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