Medicare Advantage Increase Good News for Healthcare Providers

The Centers for Medicare and Medicaid Services changed its collective mind and increased reimbursements to insurers for Medicare Advantage plans rather than follow through with a proposed cut of 2.3 percent.

CMS announced a 3.3 percent increase in the reimbursement rate for 2014, representing a 5.6 percent swing which pundits believe was the result of heavy lobbying by the health insurance industry.

Insurers warned that if the cut had been enacted, they warned the industry would be forced to boost rates and some would abandon the Medicare Advantage market. Thanks to the reimbursement increase, fewer patients will be losing their respective plan, changing their plan, or dropping them all together, which is good news for healthcare providers.

CMS justified the increase based on the assumption that “a zero percent change for the 2014 physician fee schedule (PFS) by taking into account the likely Congressional override of the schedule physician payment reduction.”

Providers also will be pleased to learn that Medicare Advantage beneficiaries will also see small decreases in deductibles and maximum out-of-pocket costs in 2014, CMS announced.

Reuters has an excellent summary of the Medicare Advantage political battle and impacts here.