Insurer Groups Object, but Analysts View RADV Rule Headwinds as ‘Manageable’
Although health insurance trade groups slammed a final rule that will cause the government to claw back billions of dollars’ worth of overpayments to Medicare Advantage organizations (MAOs), some equities analysts pointed out that the regulation was not as bad as it could have been. What remains unclear, however, is whether the industry will challenge the rule in court.
“Our high-level takeaway is that, while some components of the rule run counter to the industry’s requirements, the absolute impact that CMS is forecasting is manageable within the context of a program that will soon approach $400 [billion],” Credit Suisse’s A.J. Rice advised investors. In fact, CMS estimates that payment clawbacks under the rule will amount to $4.7 billion through 2032, or $470 million annually over 10 years, he noted. “This would represent roughly 0.1% of annual program spend.”
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