CMS Finalizes Rule on Medicare Advantage Pay Raise Based on Patient Encounter Data

The Centers for Medicare and Medicaid Services (CMS) has finalized its rule to give Medicare Advantage plans a 2.53 percent pay raise in 2020, up from its original plan to raise pay 1.59 percent. However, the raise is 3.4 percent lower than the one given to the plans in 2019, and it will be based on a higher percentage of patient encounter data. The finalized rule also allows the plans more flexibility to offer chronic illness patients supplemental benefits that won’t necessarily cure their conditions but will address social and environmental factors that affect their health. Plans will also be able to tailor benefits or reduce cost-sharing to meet certain members’ needs. For instance, according to CMS Administrator Seema Verma, the plans could pay for home air filters or carpet shampooing for patients with asthma or pay for heart-healthy meals for heart disease patients. This is a significant departure from the previous policy that allowed coverage only for services that prevented, improved or cured patients’ conditions, and that prohibited plans from offering different benefits to patients.

“These changes to the model better reflect costs and improve the financing for the care of beneficiaries with multiple conditions,” said Verma. In addition to encounter data, CMS said it is moving ahead with plans to adjust payments to reflect patients’ total number of medical conditions, a change required by the 21st Century Cures Act.