By Paloma Nazar on March 6, 2015 —
CMS has proposed a 0.95% decrease in Medicare Advantage payment rates for 2016, a stark contrast to the estimated 2.0% increase previewed in December 2014. This is likely due to updated figures relating to actual Medicare costs and the rate of fee-for-service Medicare spending growth. The proposed changes are not being well received by all in Congress or the healthcare insurance industry due to the potential effects they may have on Medicare Advantage organizations, which may see an impact on their bottom lines if further cutbacks are made. These changes will also trickle down to providers.
In spite of the 0.95% rate cut, CMS projects that insurers will see their revenue increase by 1.05% due to an expected, continued growth in the delivery of more intense services and consequent growth in plan risk scores due to coding.
CSG Actuarial will be following the impact of the potential rate cuts and our findings will be available in our 5th annual Medicare Supplement Projection, to be published later this summer.
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