CMS does about-face on Medicare Advantage payment cuts

    By Jonathan Block

    Posted: April 1, 2013 – 7:30 pm ET


    Apparently swayed by insurers and lawmakers, the CMS backtracked on an earlier plan to cut Medicare Advantage payments to insurers by 2.2% in 2014 and instead decided to give them a 3.3% increase.The CMS ultimately agreed, according to a final payment policy issued today (PDF), that “it is a more reasonable expectation” that Congress will again act to avert the dramatic physician pay cut scheduled under Medicare’s sustainable growth rate formula. A draft policy issued in February was based on the CMS’ actuary’s customary calculation based on current law.

    The about-face comes after a vocal lobbying campaign group from trade associations, particularly America’s Health Insurance Plans. The health insurers’ trade group released a report conducted by actuarial consulting firm Oliver Wyman arguing that an average Medicare Advantage beneficiary would see premiums $50 to $90 higher each month, and possibly reduced benefits.

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    PDF available of Modern ealth care link