Although under pressure from Medicare Advantage (MA) plans and some Congressional members to pay Medicare Advantage (MA) plans more in 2025, the Centers for Medicare & Medicaid Services (CMS) finalized MA plan 2025 rates at its proposed 3.7% level based upon more complete data on utilization and growth rate on April 1.
When the 3.7% increase was proposed, plans expressed concerns that the 3.7% increase does not reflect current utilization, inflation, and risk score growth; and as such, they argued it resulted in a cut of 0.16% because health risk scores have increased more than the rate increase to 3.86%. The final payment announcement and rate accounts for growth in Medicare FFS costs health risk scores, and incorporates utilization data from the fourth quarter of 2023, which does not show higher utilization patterns than anticipated.
The final rate reflects an average expected increase across plan though there will be variation in the specific amounts plans receive based upon a variety of plan-specific factors. Therefore, some plans will receive more and others less in 2025 than 3.7%.
LeadingAge’s President/CEO, Katie Sloan Smith, expressed concerns over the rates, saying that CMS pays more for Medicare coverage provided to beneficiaries through MA plans than fee-for-service Medicare. Sloan Smith stated, “Medicare Advantage must work for all: beneficiaries, providers, taxpayers and plans. Its beneficiaries deserve to receive the care they need, and providers, who deliver it, deserve to be paid for services they deliver in a financially sustainable way.”
Members can read Smith Sloan’s statement by clicking here.