Ritter Insurance Marketing, Craig Ritter

CMS Issues Preliminary 2013 Medicare Advantage Reimbursement Rate Increases

On Friday, CMS issued it’s preliminary numbers for the 2013 increase in reimbursement to Medicare Advantage plan sponsors.  You can view the entire preliminary 2013 CMS Call letter here.  Final reimbursement numbers will come out on April 2nd.

Initial indications are quite positive for Medicare advantage as CMS projected a 2.3% per capita increase and a 2.47% overall growth rate.  This compares with insiders views which ranged from no change to a negative 5% change.  In fact, CMS issued a statement regarding the numbers, “This positive growth trend will help ensure that beneficiaries maintain a choice of plans without significant increases in premiums or decreases in benefits.”

It appears that there is a desire by CMS to maintain Medicare advantage premiums and benefits for 2013.  Whether this is just election year positioning or a part of a longer term trend, the early indications look quite good for Medicare advantage in 2013.

Last year, however, CMS issued an initial estimate of 1.6% which was later reduced to 0.4%, so we’ll have to wait until April 2nd to get a clearer picture for 2013.  In addition, CMS is looking at re-basing the county tier structure for 2013 which may positively or negatively impact individual counties (depending on whether they move up or down in the tier structure).  The re-basing impact is somewhat muted by the fact that CMS will phase in the re-basing change over 2 years (2013 will be an average of the current rate and new rate and 2014 will be a full phase in of the new rate.

The story was also covered by Reuters and the Wall Street Journal.


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