MA Plans Object To Flat 2027 Rates
The Medicare Advantage (MA) community was shocked by the near-flat rates that the Centers for Medicare and Medicaid Services (CMS) proposed for 2027. MA plans are now laying out the potential impacts in comments on the proposed regulation.
The rate hike was computed at just 0.09% due to two new risk adjustment reforms – one embedded in the new v28 model and another that bars risk scoring unless diagnoses also appear on submitted provider encounters. The changes wiped out the economic growth increase.
Various MA plan trade groups were unanimous in saying that the rate as is could undermine the program yet again. Major health plan trade group AHIP said in comments to the proposed rule that the flat rate “risks undermining CMS’ goal of providing beneficiaries with stable, affordable choices during the annual enrollment period.” It noted sharply rising medical costs and high utilization in the program. It cited an analysis from actuarial and consulting firm Wakely that member premiums could increase by $23 per month if insurers maintain existing benefits — $550 per year for a couple. Wakely said benefits might have to be cut by 50% to maintain $0 premiums, including important vision and dental benefits, and out-of-pocket costs could surge by $1,000.
The Blue Cross Blue Shield Association said that smaller, regional Blues plans have fewer avenues to absorb revenue losses in MA compared to the big MA plans. The Better Medicare Alliance, which advocates for consumers, said the disruption that occurred in the 2026 open enrollment, including record forced plan changes, would worsen.
I do not think CMS will back off of the risk adjustment proposals, but I do expect the final economic growth numbers to grow by between 2 and 3 percent, which will give some relief. But it will still mean major reductions again in 2027.
#medicareadvantage #rates
What Would Chat GPT Say About AI Regulation Heating Up?
Interesting Kaiser Health News article on the debate over AI regulation. Governors of both parties, including FL Republican Ron DeSantis and CA Democrat Gavin Newsom are supporting bills that would regulate AI’s use in many areas, including healthcare. On the other side, President Donald Trump has signed an executive order that would bar states from regulating AI’s use. This will be fought in court by states. The states feel AI can be used inappropriately and impact Americans, while Trump takes the position that virtually any regulation will stifle innovation by creating a patchwork regulatory systems. Some governors, while in favor of regulation, have stopped efforts that in fact regulate too much.
(Article may require a subscription.)
#ai #regulation #healthcare
https://www.modernhealthcare.com/politics-regulation/mh-states-ai-insurance-regulations-trump
OBBBA Medicaid Fallout In States
A new RAND study finds that the One Big Beautiful Bill Act (OBBBA) will reduce state Medicaid budgets by $664 billion through 2034. Impacts by state could differ based on Medicaid expansion status, reliance on provider taxes, and the use of state-directed payments. RAND is projecting 7.6 million fewer Medicaid enrollees by 2034 and overall savings of $714 billion. This savings comes very close to Congressional Budget Office (CBO) estimates. Work requirements are projected to reduce state budgets by nearly $350 billion through 2034 and provider tax reforms $278 billion. Twenty states are expected to see Medicaid budget reductions of 5% or more.
Medicaid managed care insurers also are saying that risk in the program is rising faster than rate reimbursement following redeterminations coming back after the COVID pandemic exceptions. The overall financial picture at states will make it difficult for Medicare managed care plans to close that gap.
#obbba #medicaid #healthcare #coverage
https://www.beckershospitalreview.com/finance/state-medicaid-budgets-to-lose-664b-under-obbba-study/
No Surprises Report Shows Provider Benefits
The Department of Health and Human Services (HHS) released its third report on the No Surprises Act impacts to healthcare markets. It finds some interesting trends consistent with past reports:
- Providers won about 80% of arbitration disputes for emergency and non-emergency services and roughly 85% for air ambulance services.
- Median payment determinations were at least double the median qualifying payment amounts and ranged from 172% to 349% of median commercial out-of-network payment rates.
#pricetransparency #nsa #nosurprisesact #providers #healthplans
https://www.beckerspayer.com/payer/hhs-no-surprises-act-hit-self-insured-plans-hardest/
— Marc S. Ryan
