CMS Preview Indicates Medicare Advantage Rates on Rise in 2017

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By Mindy Yochelson

Dec. 2 — The Medicare agency's preview of underlying numbers behind Medicare managed care rates for 2017 shows payments could increase over 2016, according to a memorandum released Dec. 1.

Jennifer Lazio, director of the Centers for Medicare & Medicaid Services' Parts C & D Actuarial Group, told plans of a projected rise in the 2017 fee-for-service United States Per Capita Cost (USPCC) for beneficiaries.

The USPCC is a component used to determine county payment rates to plans. “Based on these estimates, the early preview of the [calendar year] 2017 ratebook growth rates” is projected to be 3.1 percent, the memo said.

‘Early Holiday Gift.'

Barclays Capital Inc. called the announcement “an early holiday gift” for the managed care industry. Although the announcement is only a “starting point,” and there will be “many other reconciling items,” the company said in an analysis that “we view the overall preview as a positive.”

Lazio, however, cautioned that “estimates are preliminary and could change when the final rates are published.”

In the 2016 preliminary rate notice, the CMS predicted that rates would drop by 0.95 percent but they actually increased by 1.25 percent (66 HCDR, 4/7/15).

Preliminary rates for 2017 will be published in a 45-day notice on Feb. 19, 2016, and the final rate announcement will be made on April 4, 2016.

Trade Group Caution

As has been the case over the past couple of years, these estimates do change as the CMS considers different policy options for Medicare Advantage, a spokeswoman for America's Health Insurance Plans, the main trade association representing the health insurance industry, told Bloomberg BNA.

With Affordable Care Act cuts to MA continuing, the growing program needs to be strengthened as millions of beneficiaries depend on it, she said.

To contact the reporter on this story: Mindy Yochelson in Washington at

To contact the editor responsible for this story: Brent Bierman at