News Briefs: CMS Projects MA Plans Will Receive Average Pay Boost of 3.7% in 2025

Medicare Advantage plans next year can expect to receive, on average, a 3.70% increase in risk adjusted revenue, according to the 2025 Advance Notice of payment changes for MA and Part D plans, released on Jan. 31. That’s when taking into account a 2.45% revenue decline stemming from CMS’s phased-in risk model revision and fee-for-service (FFS) normalization, an effective growth rate of 2.44% and an average increase in risk scores of 3.86%, according to a CMS fact sheet. CMS this time last year estimated that plans would see a modest rate increase of 1.03%, but revised that projection to 3.32% for 2024 after deciding to phase in changes to the CMS-Hierarchical Condition Categories risk adjustment model starting this year. CMS said it plans to proceed with the phase-in as described in last year’s rate notice and is “proposing updates to the Part D risk adjustment model to reflect the redesign of the Part D benefit as required by the IRA [Inflation Reduction Act].” CMS requested comments on the proposals by March 1; the final rate notice is expected to be released no later than April 1.

© 2024 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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