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April 3, 2023
2023-0645

CMS issues CY 2024 Medicare Advantage rate announcement

On March 31, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2024 Medicare Advantage (MA) and Part D Rate Announcement, which includes a projected 3.32% payment bump for MA plans in CY 2024. CMS in the Rate Announcement finalized its controversial update to the MA risk adjustment model, but instead of implementing all of the changes in 2024, the agency said it will phase the changes in over a three-year period. Technical updates to medical education payments in the Non-End-Stage Renal Disease (ESRD) United States Per-Capita Cost (USPCC) baseline will also be phased in.

CMS said it extended the implementation timeline in response to feedback from plans and providers but reiterated the agency's commitment to ensuring payments accurately reflect what it costs to care for beneficiaries and making the model less susceptible to discretionary coding and overpayment. CMS Administrator Chiquita Brooks-LaSure said in a press release, "Medicare should be providing equitable, high-quality affordable care that will be available for our children and grandchildren … paying Medicare Advantage plans more accurately for the care they provide is how we ensure that people enrolled in Medicare Advantage, especially populations with the highest health disparities and people in underserved communities, can continue to access the care they deserve."

CMS responded to industry comments throughout the Rate Announcement, addressing criticism that the changes would negatively impact vulnerable populations such as dual-eligible beneficiaries and those with chronic conditions, disincentivize participation in value-based payment models, and lead to fewer benefits for beneficiaries, among other comments. CMS, however, said the policies are "commonsense, clinically-based technical updates that are crucial to ensuring that payments to MA organizations are up to date and reflect current diagnostic and expenditure trends," adding that they were "finalized using careful analyses, iterative clinical input, and with CMS' strategic pillars, especially our commitment to health equity, top of mind."

Additional information is also available in the attached Tax Alert.

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Contact Information
For additional information concerning this Alert, please contact:
 
Washington Council Ernst & Young
   • Heather Meade (heather.meade@ey.com)
   • Heather Bell (heather.bell@ey.com)

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ATTACHMENT

CY 2024 Medicare Advantage rate announcement

 

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