MAOs Anticipate All-In Pay Increase of 8.5%, Await Final Rule

Perhaps the biggest headline from the largely uneventful 2023 final rate notice for Medicare Advantage and Part D plans is that they will, on average, receive a slightly higher-than-anticipated pay bump next year. Also, risk scores will not be reduced by any more than the statutory minimum adjustment of 5.9%. However, MAOs are still waiting on the final version of an MA and Part D rule containing some provisions that could impact 2023 bids, and sources at press time suggested its release was imminent.

With the April 4 release of the 2023 Rate Announcement, CMS finalized most aspects of its rate proposal for next year but increased the effective growth rate from 4.75% to 4.88%, bringing the expected average change in revenue to 8.50% — one of the highest updates in recent history. CMS maintained an estimated risk score coding trend of 3.5% and a fee-for-service normalization factor — which is used to offset the trend in risk scores and keep the FFS risk score at the same average level over time — of -0.81%. CMS also said it would continue to apply an across-the-board adjustment of 5.9% to offset the effects of higher levels of coding intensity in MA relative to FFS Medicare. That coding intensity adjustment generated much discussion in comment letters on the Advance Notice.

© 2022 MMIT
Lauren Flynn Kelly

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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