The CMS Monday finalized a 1.66% pay bump for Medicare Advantage plans, lower than last year's 2.53% pay raise.
The agency is also finalizing several changes to how it pays Medicare Advantage and Part D plans, as well as Programs of All-Inclusive Care for the Elderly, or PACE.
In February, the CMS proposed a 0.93% increase in payments for Medicare Advantage plans that met stiff industry opposition.
The CMS will continue phasing in its risk-scoring methodology as proposed. The newer risk-scoring model will now play a bigger role in determining payments to Medicare Advantage plans, with 75% of the risk score stemming from the new model and 25% from the 2017 model, the CMS said in a fact sheet.
Congress required the agency to gradually roll out the new payment methodology under the 21st Century Cures Act.
The CMS also doubled down on its plan to dramatically increase how heavily it weighs encounter data when it creates risk scores to determine federal payments to Medicare Advantage plans. Encounter data will now make up 75% of the score compared to 50% last year and just 25% the year before.
Insurers balked at the Trump administration's proposal earlier this year, arguing that the move will cut payments to plans and that the data isn't reliable. They made the same argument the year before to no avail.
But Advantage plans will catch a break this year, as the CMS elected to adjust the coding pattern by 5.9%, the minimum required by law. The adjustment is supposed to account for differences in how Medicare Advantage organizations and fee-for-service providers code for diagnoses.
People with end-stage renal disease will also be able to enroll in Medicare Advantage plans starting next year, as mandated by the 21st Century Cures Act. Commercial payers won't have to pay for organ acquisition costs anymore, which would be covered by fee-for-service Medicare.
The federal government use risk scores to adjust payments to Medicare Advantage plans based on beneficiaries' health, socioeconomic status and other criteria. That information is combined with medical coding, and plans with riskier beneficiaries get higher payments from the CMS than plans with less risky enrollees.