CMS has released its proposal for 2019 Medicare Part C rates. CMS indicated it expects an average change in revenue of 1.84 percent for Medicare managed care plans for 2019 as a result of the proposed policy changes.

The chart below details the expected impact of the proposed policy changes on plan payments relative to last year:

Notably, the 1.84 percent increase does not include an adjustment for underlying coding trends on risk scores. CMS has predicted that risk scores will increase, on average, by 3.1 percent. This increase along with the proposed rate increase could mean that Medicare Advantage plans could see payment rates rise by an average of 4.94 percent.

On December 27, 2017, CMS released Part I of the Advanced Notice, which proposed changes to the risk adjustment model for MA plans. The proposed model includes adjusting for mental health, substance use disorder, chronic kidney disease conditions, and the presence of multiple conditions. The proposed changes reflect CMS’s broader mandate under the 21st Century Cures Act to improve risk adjustment to better reflect the needs of the enrolled beneficiaries. CMS is proposing to begin the phase-in of this new model in 2019, starting with a blend of 75 percent of the risk adjustment model used for payment in 2017 and 2018 and 25 percent of the new risk adjustment model proposed. By 2022, CMS will have fully phased-in the new model.

CMS is accepting comments on the proposal until March 5, 2018. The final 2019 Rate Announcement will be published April 2, 2019. To view Part II of the Advance Notice, click here. CMS’s Fact Sheet is available here.