CMS Reverses Course, Raises Medicare Advantage Reimbursement Rates.

The Washington Post  (4/2, Somashekhar) reports that the Obama Administration has reversed its plans to cut Medicare Advantage reimbursement rates by 2.2 percent. On Monday, “the Centers for Medicare and Medicaid Services (CMS) announced that it was changing its method of calculating reimbursement rates. Instead of cutting payments for Medicare Advantage plans, it will increase them by 3.3 percent.” This follows the objections of “the insurance industry and more than 100 members of Congress,” who “argued that the administration was using faulty methodology.” Jonathan Blum, CMS’ acting principal deputy administrator, said in a statement, “The policies announced today further the agency’s goal of improving payment accuracy in all our programs, while at the same time ensuring program stability and preserving beneficiary choice.”

The AP  (4/2) reports, “Health insurers had predicted big, painful changes for many of their Medicare Advantage customers after the federal government said in February that the amount it pays per person for the popular coverage could fall more than 2 percent in 2014. The Centers for Medicare and Medicaid Services then changed course on Monday and said it now expects that the cost per person to climb more than 3 percent.”

In an article titled “Medicare Advantage Insurers Win Round,” the Wall Street Journal  (4/2, B3, Kamp, Subscription Publication) quotes America’s Health Insurance Plans President and Chief Executive Karen Ignagni, who said, “CMS has taken an important step to help stabilize Medicare Advantage at a time when the program is facing significant challenges.”

Reuters  (4/2, Kelly) notes that shares of Medicare Advantage providers like Humana rose after the announcement Monday.

The Washington Times  (4/2, Howell) reports that “CMS said it changed its mind after concluding that Congress will once again act to stave off a 25 percent cut in overall payments to doctors who treat Medicare patients, something lawmakers do every year in a maneuver called the ‘doc fix.'”

In an article published before the announcement, the AP  (4/1) reported that analysts have “said they expect CMS to take steps to ease the severity of any payment reductions.”

Also reporting are Bloomberg News  (4/2, Wayne), CQ  (4/2, Norman, Reichard, Subscription Publication), The Hill  (4/2, Baker) “Healthwatch” blog, and Modern Healthcare  (4/2, Block, Subscription Publication).