CMS Announces 2018 Changes to Medicare Advantage and Part D

On April 3, the Centers for Medicare & Medicaid Services (CMS) released final updates to the Medicare Advantage and Part D Prescription Drug Programs for 2018.


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“Medicare is committed to strengthening Medicare Advantage and the Prescription Drug Program by supporting flexibility and efficiency,” said CMS Administrator Seema Verma, MPH, quoted in a press release. “These programs have been successful in allowing innovative approaches that give Medicare enrollees options that best fit their individual health needs.”

The final policies are similar to those proposed and discussed in the Advance Notice and draft Call Letter in February, but incorporate several changes in response to feedback received during the public comment period.

On average, plans can expect a revenue change of 0.45%, though individual experiences will vary. When accounting for the expected growth in coding acuity, plans can expect a total change of 2.95% in revenue. Plans that improve the quality of care they deliver to enrollees will see higher updates and can grow and enhance the benefits they offer to enrollees, says CMS.

The policies in the Rate Announcement provide incentives for plans to submit complete encounter data. In 2018, CMS is modifying the phase-in of the use of encounter data and will use encounter data for 15% of the risk adjustment payment to Medicare Advantage plans.

CMS is also finalizing policies that will further combat opioid overutilization by encouraging safeguards before an opioid prescription is dispensed at the pharmacy.

In addition to the payment and policy updates for Medicare Advantage and Part D, CMS is releasing a Request for Information to solicit continued feedback through April 24, 2017, on Medicare Advantage and Part D. CMS is soliciting ideas for regulatory, sub-regulatory, policy, practice, and procedural changes to better accomplish transparency, flexibility, program simplification, and innovation in Medicare Advantage and Part D.

A fact sheet on the 2018 Rate Announcement and Call Letter is available here.

The 2018 Rate Announcement and Call Letter, as well as the Request for Information, are available here (select “2018 Announcement”).