CMS boosts payment rate for Medicare Advantage plans

Amid the coronavirus pandemic, the increase is larger than originally proposed for private plans in 2021

Seema Verma, administrator of the Centers for Medicare and Medicaid Services, is shown at her confirmation hearing. The agency on Monday announced higher 2021 payment rates for private Medicare plans. (Bill Clark/CQ Roll Call file photo)
Seema Verma, administrator of the Centers for Medicare and Medicaid Services, is shown at her confirmation hearing. The agency on Monday announced higher 2021 payment rates for private Medicare plans. (Bill Clark/CQ Roll Call file photo)
Posted April 6, 2020 at 6:11pm

The Centers for Medicare and Medicaid Services announced Monday a 1.66 percent payment boost for Medicare Advantage plans in 2021, slightly higher than the 0.93 percent increase the department proposed in February.

The increase is lower than the 2.53 percent boost CMS gave the private plans for 2020. Industry observers were watching to see if the department would increase the final rate in response to the coronavirus outbreak.

CMS declined to alter its payment methodology related to end-stage renal disease patients, although the reimbursement level will be higher than first proposed, according to the notice and a fact sheet.

These kidney disease patients are only allowed to enroll in Medicare Advantage plans under certain circumstances, but a 2016 law designed to spur the development of cures lifted those restrictions starting in 2021. Insurance companies have urged CMS to increase payment benchmarks by calculating them at the county level rather than the state level, which they say would better reflect high labor costs in metropolitan areas where many kidney patients are concentrated.

Plans will see some cost relief, however. The law also required Medicare to pay for the cost of organ acquisitions, instead of private plans.

America’s Health Insurance Plans condemned the overall payment rate when CMS first proposed the 0.93 increase in February, labeling the rates for end-stage renal disease patients as “wholly inadequate.” The group estimates that one quarter of the 500,000 Medicare-eligible kidney patients are already enrolled in private plans, with CMS estimating that enrollment will increase 30 percent next year.

Analysts say the increased financial pressure would help spur the movement toward home-based dialysis and transplants, a major goal for the Trump administration’s ESRD initiative.

CMS has yet to finalize a number of other policies included in a separate proposal released in tandem with the advance rate notice in February.