CMS: Medicare advantage rate increases will be lower-than-expected

The payments will be lower than initially projected because of lower-than-expected spending on doctor visits.

Bloomberg: UnitedHealth, Humana To See 0.4% Medicare Rate Rise In 2012
Medicare payments to U.S. health insurers led by UnitedHealth Group Inc. (UNH) and Humana Inc. (HUM) will increase 0.4 percent in 2012, less than projected because of lower-than-expected spending on doctor visits, regulators said. The Baltimore-based Centers for Medicare and Medicaid Services announced in February the private health plans may expect an average 1.6 percent gain in payments. Medicare spent less than administrators expected on physician visits in 2010, Jonathan Blum, a deputy director of the agency, said during a conference call after the close of U.S. markets. Payments to Medicare Advantage plans are tied to overall program spending (Young, 4/4).

CQ HealthBeat: Officials Announce Lower Reimbursements for Medicare Advantage Plans
Private health plans that serve Medicare patients will get lower reimbursement increases than expected under rules announced Monday by federal officials. The Medicare Advantage plans will get about a 0.4 percent increase on average in 2012, although the specific increase for each plan will vary, said Jonathan Blum, Center for Medicare deputy administrator and director. The payments are affected by the geographical location of the plans and new ratings aimed at evaluating the quality of health care plans. The lower reimbursement is due to new data rather than any change in policy; Part B physician outlays were lower than previously anticipated, Blum explained on a call with reporters late Monday afternoon (Adams, 4/4).

Politico Pro: MA Rates To Increase Slightly
CMS officials said that the change was due to economic data and not a result of policy changes from the agency. An industry source summed up the announcement, saying "there seems to be stability and no surprises." The final rule on both Medicare Advantage and the prescription drug program, however, had not been released by press time and an industry source suggested it won't be published until Tuesday. The increases in payments to the plans will be "highly variable" because there is also a demonstration program that MA plans can participate in to receive star ratings that are tied to bonus payments in 2012 (Coughlin, 4/4).