CMS Proposes Changes to Promote Stable and Fair Payments to MA and Part D Prescription Drug Plans

by | Last updated Feb 8, 2024 | Published on Mar 11, 2016 | Medical Billing

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Completing and processing medical billing claims for patients enrolled in the Medicare and Medicaid programs requires specialized knowledge and also awareness about changing scenario. Last month, the Centers for Medicare & Medicaid Services (CMS) released its 2017 Advance Rate Notice and 2017 Draft Call Letter for the Medicare Advantage (MA) and Part D prescription drug programs. If finalized, the new proposals are expected to ensure stable and fair payments to plans, and also make positive changes to the program for plans that provide high quality care to seniors and people living with disabilities. Plans that improve the quality of care they deliver to enrollees can expect to experience higher updates and can grow, enhancing the benefits they offer to enrollees. One key proposal is to adjust Star Ratings to reflect the socioeconomic and disability status of a plan’s enrollees.

2017 Advance Notice/Payment Changes – Notable Proposals

  • Net Payment Increase: One noteworthy proposal is the overall increase in net payments to MA plans and Part D plan sponsors. According to CMS, the Advance Notice policy changes to improve payment accuracy will increase plan revenue by 1.35% and total plan revenue by as much as 3.55% when combined with the annual expected growth in risk scores.
  • Updated Risk Adjustment Model: CMS proposes to revise the methodology used to risk adjust payments to plans to more accurately reflect the cost of care for dually Medicare-Medicaid eligible beneficiaries. The community segment would be classified into six subgroups: non-dual aged, non-dual disabled, full benefit dual aged, full benefit dual disabled, partial benefit dual aged, and partial benefit dual disabled.
  • Update of the RxHCC Model for Part D: The influx of high cost medications is one of the factors underlying this update. For 2017, CMS proposes to update and implement the existing RxHCC risk adjustment model used to adjust direct subsidy payments for Part D benefits offered by stand-alone Prescription Drug Plans (PDPs) and Medicare Advantage-Prescription Drug Plans (MA-PDs).

The net payment impact of the proposed updates would result in a modest increase of 1.35 percent on average for Medicare Advantage plans, although the change will vary across individual plans.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was signed into law on April 16, 2015 to stabilize Medicare physician pay. Medicare now rewards physicians based on the quality of care provided, rather than the quantity of procedures performed. As Medicare celebrated its 50th anniversary in 2015, it provided coverage for more than 55 million Americans. For physician practices, knowledge about medical billing and coding for claims associated with Medicare and Medicaid is crucial for success with revenue cycle management. A professional medical coding company can ensure this.

Natalie Tornese

Holding a CPC certification from the American Academy of Professional Coders (AAPC), Natalie is a seasoned professional actively managing medical billing, medical coding, verification, and authorization services at OSI.

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