Another Flat Year For Medicare Advantage Before Risk Score Trends
The Centers for Medicare and Medicaid Services (CMS) announced the 2025 rate hike for Medicare Advantage will be relatively flat. This is similar to what happened in 2024 after big increases in 2022 and 2023. The effective growth rate was up, but the phase-in of a new risk adjustment model basically offsets those gains. The final notice may push these numbers up a bit. If you include risk score trends, MA revenue could increase by about 3.7%. So real revenue should be up, but health plans don’t like thinking of it that way as they think risk score trends tie to increased medical exposure.
I include all these articles here but read with caution as many reporters interpret things differently. In the end, this is not the worst news, but it is bad in the face of some major medical expense and utilization increases. See my recent blog here for where MA is headed: https://www.healthcarelabyrinth.com/with-boom-over-will-medicare-advantage-collapse-or-adjust/
The CMS Fact Sheet is at the link. Additional government releases and fact sheets here: https://www.cms.gov/newsroom/press-releases/cms-releases-proposed-payment-updates-2025-medicare-advantage-and-part-d-programs and https://www.hhs.gov/about/news/2024/01/31/cms-releases-proposed-payment-updates-2025-medicare-advantage-part-d-programs.html and https://www.hhs.gov/about/news/2024/01/31/biden-harris-administration-strengthening-medicare-protecting-and-serving-americas-seniors.html
Additional articles here: https://www.fiercehealthcare.com/payers/cms-proposes-37-pay-rate-increase-ma-plans-redesigning-part-d-program and https://www.modernhealthcare.com/politics-policy/cms-proposes-medicare-advantage-pay-cuts-2025-ahip and https://insidehealthpolicy.com/daily-news/cms-expects-37-ma-pay-bump-after-2024-s-advance-notice-tumult and https://www.statnews.com/2024/01/31/medicare-advantage-2025-proposed-payment/ .
(Some articles may require a subscription.)
#medicareadvantage #rates #payments
