Medicare Advantage payments to increase 1.25% in 2016

Medicare Advantage payments to health plans will increase an estimated 1.25 percent next year, according to a Centers for Medicare & Medicaid Services (CMS) rate announcement and call letter published on April 6.

CMS also expects an average 2 percent increase in revenue due to coding changes. The original call letter was released on Feb. 20, but was updated after CMS received feedback on the proposals.

Since the passage of the Patient Protection and Affordable Care Act in March 2010, enrollment in Medicare Advantage plans has increased 42 percent. This year, 16 million beneficiaries are in Medicare Advantage plans, accounting for nearly 30 percent of people with Medicare.

CMS added that average premiums have decreased 6 percent between 2010 and 2015, as well. Further, 60 percent of Medicare Advantage beneficiaries are enrolled in a four or five star plan compared with 17 percent in 2009.

The proposals also mentioned the January announcement from Health and Human Services Secretary Sylvia Burwell to move toward a value-based payment system. CMS said it would work with Medicare Advantage plans to adopt value-based models that pay providers based on the quality of care they deliver.