The Obama Administrations Plan To Change Medicare Advantage

The White House is currently moving forward with its plan to impose controversial cuts to employer-based Medicare Advantage plans.  The Centers for Medicare & Medicaid Services (CMS) is opting to phase in the cuts to the employer-based Medicare Advantage plans over the course of a two year period in order to make the transition easier for employers.  This column discusses some of the mixed reactions to the Obama administrations announcement from business leaders and members of congress.  The CMS has also announced that they will scale up their use of medical claims data when they are determining payment rates.  There will also be changes to the payment formula and star quality rating system so that they can be more accurate when compensating plans that tend to attract customers who are disproportionately sicker and more expensive to care for.

See Dan Diamond, How the White House will change Medicare Advantage, Politico, April 5, 2016.