Un­der in­tense lob­by­ing pres­sure, CMS to is­sue fi­nal Ad­van­tage rates

Modern Healthcare - - THE WEEK AHEAD - —Paul Demko

Lots of lob­by­ists will be watch­ing when the CMS an­nounces fi­nal 2015 pay­ment poli­cies for Medi­care Ad­van­tage plans on April 7.

While the agency’s cal­cu­lus to de­ter­mine rates is com­plex, most fi­nan­cial an­a­lysts pegged the pro­posed cuts at 3% to 5% when the CMS an­nounced its pre­lim­i­nary pol­icy Feb. 21. That was a smaller cut than most in­sur­ers and an­a­lysts an­tic­i­pated. The stock prices of the two largest Ad­van­tage in­sur­ers, Unit­edHealth Group and Hu­mana, spiked in the fol­low­ing weeks. Com­bined, the two com­pa­nies cover more than a third of all en­rollees.

Amer­ica’s Health In­sur­ance Plans has been lob­by­ing fever­ishly to soften the pro­posed cuts, ar­gu­ing they’ll lead to skimpier ben­e­fits and higher costs for se­niors. It seems that ev­ery commercial break on CNN fea­tures an AHIP ad warn­ing of dire con­se­quences if the rates aren’t re­vised up­ward.

That mes­sage has found a re­cep­tive ear in Congress. A bi­par­ti­san group of 204 House mem­bers sent a let­ter to CMS Ad­min­is­tra­tor Mar­i­lyn Taven­ner cau­tion­ing that “Medi­care Ad­van­tage ben­e­fi­cia­ries should not be forced to shoul­der any fur­ther fund­ing cuts to the pro­gram.” The govern­ment spends sig­nif­i­cantly more per Ad­van­tage en­rollee than it spends on tra­di­tional Medi­care ben­e­fi­cia­ries.

The Obama ad­min­is­tra­tion’s de­ci­sion this week likely will be af­fected by elec­tion con­sid­er­a­tions. Medi­care’s 2015 en­roll­ment pe­riod for Ad­van­tage plans be­gins shortly be­fore the Novem­ber elec­tions. Se­niors are ex­pected to rep­re­sent a dis­pro­por­tion­ate share of vot­ers.

“If the se­nior pop­u­la­tion feels they have been done wrong, they have a chance to vote in Novem­ber,” said Steve Zaharuk, a se­nior vice pres­i­dent with Moody’s In­vestors Ser­vice.

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