Payers Expect 3 Percent Medicare Advantage Payment Cut

Despite an official prediction that MA health plan payment rates will be essentially unchanged in 2015, Cigna, Aetna, and Humana expect payments to fall next year.

The federal Centers for Medicare & Medicaid Services announced Monday that Medicare Advantage health plan payment rates in 2015 would increase an average of 0.4 percent. But insurers are forecasting a three percent cut in 2015 MA payments.

 "While Cigna continues to review and assess the full impact of CMS's 2015 rate changes, it's clear that the full 2015 impact will include a reduction in payments, " a Cigna spokeswoman said in an email Thursday.

 "Our estimated impact to the industry is consistent with analysts' reports that the Medicare Advantage program is facing an average three percent cut from 2014 to 2015, when factoring in CMS changes with ACA and other industry fees set to take effect in 2015. "

In February, CMS proposed to cut MA payment rates at least 1.9 percent. An analysis conducted on behalf of America's Health Insurance Plans pegged the proposed cut higher, at 5.9 percent.

Cigna says CMS responded to pressure from AHIP, seniors, lawmakers and healthcare providers who opposed cuts to MA payments, but the agency should have gone farther.

 "We are pleased that CMS listened to the concerns raised by seniors who rely on this program as well as the multitude of providers that spoke about the resources the Medicare Advantage program provides to this vulnerable population. Both seniors and providers made their viewpoint clear to Congress and other stakeholder organizations about the harm the proposed cuts would have had on beneficiaries who rely on Medicare Advantage plans for their health benefits and coverage, " the Cigna representative said.

 "While the recently announced final changes are slightly more favorable than the initially proposed draft rates, the Medicare Advantage program is still facing cuts in 2015 on top of the significant impact seniors already bore as a result of CMS's six percent cuts in 2014. "

Aetna officials also urged CMS to avoid any potential cuts to MA health plan payments in 2015.

 "CMS's final rates announcement recognizes the great value that approximately 15.9 million seniors receive from their Medicare Advantage plans, which yield satisfaction rates of 90 percent, " a spokeswoman said in an email Thursday.

"Despite CMS's actions [since February], Medicare Advantage plans will still face rate decreases for 2015. Aetna continues to evaluate the impact to our Medicare Advantage and Part D products but is committed to taking steps to ensure that our plans continue to provide beneficiaries with the great value and service they have come to expect. "

In a filing Tuesday with the federal Security Exchange Commission, Humana reported that the adjustments CMS had made since February shaved less than 1 percent off the company's previous estimate of a 2015 MA payment rate cut: "Based on a preliminary review of the Final Rate Notice, Humana expects a Medicare Advantage funding decline from CMS for 2015 of approximately 3 percent versus the previously expected funding decline of 3.5 to 4.0 percent. "

Tuesday's Humana SEC filing also provides a pair of key milestones for insurers in the 2015 MA timeline:

• Bid designs for carriers' MA policy offerings are due at CMS by June 2.
• Humana plans to share 2015 operating margin, earnings and membership expectations during the fourth quarter of 2014 after CMS makes 2015 benefit designs for the entire sector available.