A few days after the feds set new Medicare Advantage (MA) rates and policies for 2027, the American Health Care Association/National Center for Assisted Living (AHCA/NCAL) said the Centers for Medicare and Medicaid Services (CMS) is taking a step-by-step approach on payments and issues like risk adjustment.

CMS on Monday released the Calendar Year (CY) 2027 MA and Part D Rate Announcement and projected a 2.48 percent, or $13 billion, increase in MA payments to plans in 2027, much higher than the January draft proposed rate hike of only 0.09 percent, or $700 million.

CMS said its policies in the Rate Announcement address coding differentials between MA and Original Medicare for CY 2027.

CMS said it is working towards a MA risk adjustment system guided by three principles: (1) simplicity to reduce day-to-day administrative burden for both plans and providers; (2) competition for all plans irrespective of size or resources, creating greater value for patients; and (3) achieving payments that accurately reflect beneficiary health risk and facilitate the efficient use of healthcare resources, enhanced program integrity, and greater accountability.

“Working towards a risk adjustment system guided by these principles will promote a more stable and sustainable MA program in the long run by giving beneficiaries and taxpayers confidence that CMS is mitigating unnecessary cost growth from coding practices that do not lead to better quality coverage,” the agency said.

In consideration of the impact that the 2024 MA risk adjustment model had between CY 2024 and CY 2026, CMS will continue using the 2024 MA risk adjustment model for CY 2027. The agency said it will evaluate the public feedback received as it considers future updates to the MA risk adjustment model.

Risk Adjustment Blues

It is on the risk adjustment non-action on updating the data years in use that caused disappointment for skilled nursing providers.

Nisha Hammel, vice president, reimbursement policy and population health at AHCA/NCAL said: “We appreciate CMS’s commitment to simplicity by strengthening program integrity and fostering competition based on value. While we were disappointed CMS did not finalize updates to risk adjustment data years, we recognize the agency is taking a measured approach.”

She added that it is important that these MA rates translate to better options for beneficiaries and adequate reimbursement for providers.

“We are committed to working with CMS to ensure Medicare Advantage strengthens health outcomes and access to care for seniors,” Hammel said.

In a previous article in Park Place Live, Anne Tumlinson, founder and CEO, ATI Advisory, said CMS is “moderating and modulating to find the right balance between pushing the plans and preventing a meltdown.”

The CY 2027 MA and Part D Rate Announcement may be viewed at: https://www.cms.gov/files/document/2027-announcement.pdf.

A fact sheet discussing the provisions of the CY 2027 MA and Part D Rate Announcement can be viewed at: https://www.cms.gov/newsroom/fact-sheets/2027-medicare-advantage-part-d-rate-announcement.

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