The Centers for Medicare and Medicaid Services on Wednesday proposed increasing Medicare Advantage payment by 7.98% in 2023 as they eye future changes to its risk adjustment model.
In a proposed payment policy for 2023, the agency asked for feedback on whether MA's risk adjustment model and star ratings could address the impacts of social determinants of health and health equity.
Medicare Advantage organizations could see an almost 8% increase in revenue next year compared to 2022, according to the proposed changes. The proposed increase is almost double the 4.08% pay increase plans saw for 2022.
This projection includes a 3.5% increase in the MA risk score trend, which represents the average increase in risk scores. Risk scores account for the expected costs of an enrollee, and are generally higher when enrollees are sicker. The projection also factors in a 4.75% effective growth rate.
"The proposed effective growth rate is higher than the prognostications I had seen. Absent a sharp reversal in the final note, this ensures another year of benefit and enrollment growth for MA plans," Michael Adelberg, head of Faegre Drinker Consulting's healthcare strategy practice, said in an email.