Amid Cost Unknowns, MAOs Will Get 1.66% Pay Increase

Facing a host of cost-related unknowns, Medicare Advantage organizations next year will be working with a slightly higher-than-expected pay increase, although CMS in its final MA and Part D rate notice made no adjustments to directly account for the impact of COVID-19 or the expected influx of patients diagnosed with end-stage renal disease (ESRD). However, the permanent repeal of the Affordable Care Act health insurer fee (HIF) and an adjustment to the Total Beneficiary Cost (TBC) measure may help offset some of the associated costs.

CMS in the 2021 rate notice released April 6 estimated that plans on average can expect a reimbursement increase of 1.66%. This was better than CMS’s initial projection of 0.93% in February (RMA 2/20/20, p. 1) but lower than the healthy 2.53% pay increase plans got this year.

© 2021 MMIT

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues, including drug benefits and specialty pharmacy, for more than a decade. She served as editor of Drug Benefit News (the predecessor to Radar on Drug Benefits) from 2004 to 2005 and again from 2011 to 2016, and now manages Radar on Medicare Advantage. Lauren graduated from Vassar College with a B.A. in English.

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