Aiming to ensure that Medicare Advantage payments are more equally distributed across geographies and that the federal government can share in the “efficiency” of MA plans, the Medicare Payment Advisory Commission (MedPAC) in its June report to Congress envisioned a “rebalancing” of the current MA benchmark policy used to calculate payment rates. Although the proposal would not translate to a complete overhaul of the current rate structure, it would mean a pay cut for many MA plans if authorized by Congress.

In the first of 10 chapters in its June 2021 Report to the Congress: Medicare and the Health Care Delivery System, MedPAC estimated that Medicare payments to MA plans this year will average about 104% of fee-for-service (FFS) spending. Meanwhile, plan bids were at 87% of FFS Medicare spending and approximately 91% of MA plans submitted bids “below the amount FFS Medicare would spend for similar beneficiaries,” stated the report.

During a June 15 web briefing with members of the press, MedPAC Executive Director Jim Mathews remarked that the MA program in many ways has been “tremendously successful,” citing year-over-year growth in enrollment, strong plan participation and record high levels of extra benefits provided to MA enrollees.

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