The Medicare Advantage plan could be an excellent alternative if traditional Medicare doesn’t meet your needs. A Medicare Advantage Plan is another Medicare health plan option available to you. Medicare Advantage Plans, also known as “Part C” or “MA Plans,” are provided by private companies that have been approved by Medicare.
If you enroll in a Medicare Advantage Plan, the plan will cover both Part A (Hospital Insurance) and Part B (Medical Insurance). Extra coverage, such as vision, hearing, dental, health, and wellness programs, may be available through Medicare Advantage Plans. The majority of them include Medicare prescription drug coverage (Part D).
Every month, Medicare pays a set amount to the companies that provide Medicare Advantage Plans for your care. These businesses must adhere to Medicare regulations. However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (such as whether you need a referral to see a specialist or if you can only go to plan doctors, facilities, or suppliers for non-emergency or non-urgent care). These rules can change each year.
Health insurers are already moving to expand their Medicare Advantage markets for 2023 despite uncertain financial markets and scrutiny of certain business practices. These efforts to expand their privatized Medicare plans into new states and counties come despite roiled financial markets that could slow funding for some companies and federal investigations into how these companies calculate risk adjustments and bill for sicker patients.
Medicare Advantage plans have agreements with the federal government to provide additional benefits and services to seniors, such as disease management and nurse help hotlines, with some also providing vision, dental, and wellness programs. In addition, the Centers for Medicare & Medicaid Services have allowed Medicare Advantage plans to cover more supplemental benefits in recent years, increasing their popularity among seniors.
The 2023 benefit year is quickly approaching. The 2023 Medicare Advantage and Part D Advance Notice is now available. Let’s look at the proposed changes and the revenue forecast for Medicare Advantage Plans in 2023.
Medicare Advantage Plans 2023 proposed changes
The Centers for Medicare & Medicaid Services (CMS) proposed payment policy changes for Medicare Advantage (MA) and Part D drug programs in 2023 on Wednesday. The proposed changes to risk adjustment, Star Ratings, and the agency’s plans to advance health equity are summarised below.
CMS stated in the 2023 Medicare Advantage and Part D Advance Notice that, in addition to proposed payment rates and risk adjustment changes, it is seeking input on a potential change to the MA and Part D Star Ratings that would consider how well each plan advances health equity. It also is requesting feedback on including a quality measure in MA and Part D Star Ratings that would specifically assess how often plans are screening for common health-related social needs, such as food insecurity, housing insecurity, and transportation problems.
Here are some changes in the Medicare Advantage plan 2023 Advance Notice.
2023 Part C Risk Adjustment
CMS plans to continue its 2022 policy to calculate 100 percent of the risk score using the 2020 CMS-HCC model. It will continue to calculate risk scores using diagnoses exclusively from MA encounter data submissions and fee-for-service claims. However, CMS does want feedback on whether the CMS-HCC risk adjustment model can be improved by addressing the impacts of social determinants of health on beneficiary health status by incorporating additional factors that predict the relative costs of Medicare Advantage enrollees.
Medicare Advantage Coding Pattern Adjustment
Each year, as required by law, CMS adjusts plan payments to reflect differences in diagnosis coding between Medicare Advantage organizations and fee-for-service providers.
For 2023, CMS is finalizing a coding pattern adjustment of 5.9%, which is the minimum adjustment for coding pattern differences required by statute.
Comments included recommendations that CMS apply a higher coding pattern adjustment than the statutory minimum and that it consider approaches that took into account differences in coding patterns across Medicare Advantage plans.
2023 End Stage Renal Disease (ESRD) Risk Adjustment
CMS uses a separate model to calculate the risk scores applied in payment for the Part A and Part B benefits provided to beneficiaries in ESRD status when enrolled in MA plans, Program of All-Inclusive Care for the Elderly (PACE) organizations, and certain demonstrations, including Medicare-Medicaid Plans (MMPs).
CMS proposes to implement a revised model for payment to MA organizations for enrollees in ESRD status and intends to use the revised model for additional organizations other than PACE. The revised model would be calibrated on more recent data, using CMS’ current approach to identify risk adjustment eligible diagnoses from encounter data records. The agency said the model also incorporates improvements previously made to the Part C CMS-HCC model, specifically the clinical updates and revised segmentation, which accounts for the differential cost patterns of dual eligible beneficiaries.
Medicare Advantage Normalization Factor
Each year, CMS calculates normalization factors to keep the FFS risk score at the same average level over time. CMS plans to use the methodology it typically uses for calculating the normalization factor, which is to project the payment year risk score using five historical years of FFS risk scores under the payment year model. CMS typically uses the most recent years of available FFS risk scores to calculate the trend. However, CMS doesn’t plan to update the years in the trend for 2023 due to concerns that the changing use of services in 2020 because of the COVID-19 pandemic resulted in an irregular 2021 risk score, which will result in a projection that significantly underestimates what the 2023 risk score is likely to be. Instead, CMS plans to use the same years of FFS risk scores that were used to calculate the slope for the 2022 normalization factors, 2016 through 2020.
2023 Part D Risk Adjustment
CMS intends to implement an updated version of the RxHCC risk adjustment model used to adjust direct subsidy payments for Part D benefits offered by stand-alone prescription drug plans (PDPs) and MA prescription drug plans (MA-PDs). The recalibrated RxHCC model includes a clinical update to the RxHCCs based on ICD-10-CM diagnosis codes rather than the ICD-9-CM codes used in the prior models. The recalibrated model also includes an update to the data years (2018 diagnoses to predict 2019 costs) using the same approach CMS uses to filter diagnoses from encounter data records for risk score calculation, including the risk adjustment allowable CPT/HCPCS codes.
Part C and D Star Ratings
CMS is seeking feedback on several potential measurement and methodological changes:
- Plans to enhance current CMS efforts to report stratified Part C and D Star rating measures by social risk factors to help MA and Part D sponsors identify opportunities for improvement
- The development of a Health Equity Index as an enhancement to the Part C and D Star rating program to summarize measure-level performance by social risk factors into a single score used in developing the overall or summary Star Rating for a contract
- The development of a measure to assess whether plans are screening their enrollees for health-related social needs such as food, housing, and transportation
- How Medicare Advantage organizations are transforming care and driving quality through value-based models with providers to use in the potential development of a Part C Star rating measure
2023 Medicare Advantage Part D Payment Policies forecast
The Centers for Medicare & Medicaid Services (CMS) today announced that the average basic monthly premium for standard Medicare Part D coverage is projected to be approximately $31.50 in 2023. This expected amount is a decrease of 1.8% from $32.08 in 2022.
CMS releases the projected average basic monthly Part D premium—calculated based on plan bids submitted to CMS—annually to help beneficiaries understand overall Part D premium trends before Medicare Open Enrollment when they can select from plan options for the upcoming benefit year.
The Medicare Part D program assists Medicare beneficiaries in paying for both brand-name and generic prescription drugs. Part D is still one of the most popular programs in Medicare, with over 49 million Medicare beneficiaries enrolled in prescription drug coverage. CMS continues to carefully examine changes to the Part D program and works with stakeholders to identify opportunities for improvement, particularly cost reduction.
CMS is also releasing new data, such as the Part D national average monthly bid amount, to assist Part D plan sponsors in finalizing premiums and preparing for Medicare Open Enrollment. Medicare Open Enrollment for coverage beginning January 1, 2023, will take place between October 15 and December 7, 2022. CMS expects to release 2023 Medicare Advantage and Part D premium and cost-sharing information in September 2022.
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