The Centers for Medicare & Medicaid Services announced on Monday the national average fee-for-service growth rate for 2010 Medicare Advantage plans. Rather than the anticipated 4.24 percent growth rate of 2009, CMS will give Medicare Advantage plans an 0.81 percent rate for 2010.
"The lower growth rate for 2010 is mainly due to the projected decline in physician payments under current Medicare payment rules," CMS said in a statement. In January 2010, physicians are expected to take a 21 percent cut in fee-for-service.
The 2010 rate also includes a negative 3.41 percent adjustment to reflect coding differences between MA organizations and the original Medicare program, and reflects a multi-year phase-out of indirect medical education costs as required by the Medicare Improvements for Patients and Providers Act, CMS said.
"The announcement provides Medicare Advantage and prescription drug plans the information they need to structure their benefits and beneficiary cost sharing and prepare their bids for the 2010 plan year," said Jonathan Blum, acting director of CMS' Center for Drug and Health Plan Choice.According to Blum, by law, CMS annually updates the Medicare Advantage capitation rates by a growth percentage that reflects growth in all Medicare expenditures, including expenditures under Part A and Part B payment rules. The growth percentage reflects the projected reduction in 2010 physician payments provided for under Part B payment rules.
For prescription drug program enrollees, the announcement included information about the 2010 Part D deductible, initial coverage limit, out-of-pocket threshold, and related parameters for the standard benefit. The annual percentage increase in average per capita Part D spending, used to update the deductible, initial coverage limit, and out-of-pocket threshold for the defined standard benefit for 2010, is 4.66 percent.
For the first time, for plan year 2010, CMS will make a "coding pattern differences adjustment" to Medicare Advantage risk scores, reducing Medicare Advantage payment rates to account for differences in disease coding patterns between Medicare Advantage organizations under Part C and the original Medicare program Parts A and B.
CMS is required by law to adjust Medicare Advantage rates where it finds differences in coding patterns between Medicare Advantage plans and Part A and Part B providers. The adjustment will be applied as a uniform 3.41 percentage reduction to all Medicare Advantage plans' Part C risk scores in 2010.
In addition, the 2010 rates announced today reflect a provision in recently enacted legislation requiring a multi-year phase-out of the inclusion of costs of indirect medical education in Medicare Advantage rates. The maximum reduction as part of this phase-out is approximately 0.60 percent per year.
The changes announced by CMS on Monday make final provisions of the Advance Notice that CMS released on February 20, 2009.