Medicare Advantage Rate Notice Ignores Fiscal Realities
AMGA is concerned the proposed rate cut in the 2025 Medicare Advantage rate notice will adversely affect medical groups and health systems, who already are absorbing payment cuts in traditional Medicare at the same time they are facing increased costs.
Alexandria, VA - AMGA is concerned the proposed rate cut in the 2025 Medicare Advantage rate notice will adversely affect medical groups and health systems, who already are absorbing payment cuts in traditional Medicare at the same time they are facing increased costs. Under the proposed 2025 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies, the Centers for Medicare & Medicaid Services (CMS) is proposing a reduction in the benchmark rate, while continuing the phase-in of a modification to the risk adjustment model. These proposals would result in a 0.16% decrease benchmark rate. In isolation, the cut may not seem significant; however, providers are facing increased costs, in part due to increased labor costs and higher demands for medical services.
“On paper, it may appear that Medicare Advantage plans can afford a little belt tightening,” said AMGA President and CEO Jerry Penso, MD, MBA. “But the providers they contract with already are facing cuts of more than 3% on the fee-for-service side. In addition, there are potential impacts to patient care, such as decreased access, a reduction in available services, and decreased programs that address social drivers of health. I think CMS is underestimating the ramifications of further payment reductions for providers and their patients.”
AMGA remains a strong supporter of the Medicare Advantage program and recently endorsed other CMS proposals intended to expand beneficiary use of supplemental benefits. AMGA believes Medicare Advantage will play a significant role in the transition to value-based care and in achieving CMS’ goal of having 100% of traditional Medicare beneficiaries in a value-based arrangement. However, payment policies related to Medicare Advantage need to establish stable and predictable financing that account for AMGA member providers’ increased expenses.
AMGA is reviewing the proposal closely and will provide additional comments.
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About AMGA
AMGA is a trade association leading the transformation of healthcare in America. Representing multispecialty medical groups and integrated systems of care, we advocate, educate, innovate, and empower our members to deliver the next level of high performance health. AMGA is the national voice promoting awareness of our members’ recognized excellence in the delivery of coordinated, high-quality, high-value care. More than 175,000 physicians practice in our member organizations, delivering care to one in three Americans.
AMGA represents medical groups and integrated systems of care. Its diverse membership includes multispecialty medical groups, integrated delivery systems, accountable care organizations, and other entities committed to improving healthcare outcomes. AMGA advocates for the formation of innovative, clinically integrated systems of care that advance population health, enhance patient experience, and reduce healthcare costs. For more information, please visit www.amga.org.