MedPAC’s ‘Rebalancing’ Policy Would Mean Lower MA Pay

Aiming to ensure that Medicare Advantage payments are more equally distributed across geographies and that the federal government can share in the “efficiency” of MA plans, the Medicare Payment Advisory Commission (MedPAC) in its June report to Congress envisioned a “rebalancing” of the current MA benchmark policy used to calculate payment rates. Although the proposal would not translate to a complete overhaul of the current rate structure, it would mean a pay cut for many MA plans if authorized by Congress.

In the first of 10 chapters in its June 2021 Report to the Congress: Medicare and the Health Care Delivery System, MedPAC estimated that Medicare payments to MA plans this year will average about 104% of fee-for-service (FFS) spending. Meanwhile, plan bids were at 87% of FFS Medicare spending and approximately 91% of MA plans submitted bids “below the amount FFS Medicare would spend for similar beneficiaries,” stated the report.

© 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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