Press ReleasesBLOG POST: CMS announces MA revenue jump in 2023, sharpens focus on health equity

Medicare Advantage plans will see an 8.5% increase in revenue next year under CMS’ announcement of final MA rates for 2023.¹ The final figure is higher than the 7.98% predicted by the agency in its advanced notice.¹

CMS also announced that the effective growth rate for MA plans for next year is set at 4.88%, up from a predicted 4.75% in the advanced notice.² “CMS’s goals for Medicare Advantage … mirror our vision for the agency’s programs as a whole, which is to advance health equity; drive comprehensive, person-centered care; and promote affordability and the sustainability of the Medicare program,” the agency wrote in its announcement.³

CMS is seeking feedback on ways it can boost health equity in MA Star Ratings.¹ The agency is considering creating a Health Equity Index that would help gauge how MA plans mitigate the effect of social risk factors for their enrollees.^1,3 Another proposal would develop a measure to assess if plans are screening members for social necessities such as food and housing.^1,3 CMS also wants to determine how MA organizations are encouraging quality and optimizing care via value-based contracts with health care providers.^3,4

The Better Medicare Alliance applauded CMS, saying the rate announcement “puts beneficiaries first and ensures stability and continuity of care for the more than 28.5 million seniors and individuals with disabilities who choose Medicare Advantage nationwide.”² The alliance also credited the agency for focusing greater attention on health equity.²

The announcement comes as MA plans garner a larger share of overall Medicare spending. MA plan payments are forecast to make up more than 50% of spending on Medicare Parts A and B by the end of this decade.⁵

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^References

1. King, Robert. CMS finalizes 8.5% rate hike for Medicare Advantage, Part D plans in 2023. Fierce Healthcare. April 4, 2022. https://www.fiercehealthcare.com/payers/cms-finalizes-85-rate-hike-medicare-advantage-part-d-plans-2023
2. Waddill, Kelsey. CMS: 2023 Medicare Advantage, Part D Rate Sees 8.5% Revenue Boost. Health Payer Intelligence. April 5, 2022. https://healthpayerintelligence.com/news/cms-2023-medicare-advantage-part-d-rate-sees-8.5-revenue-boost
3. 2023 Medicare Advantage and Part D Rate Announcement. CMS. April 4, 2022. https://www.cms.gov/newsroom/fact-sheets/2023-medicare-advantage-and-part-d-rate-announcement
4. Morse, Susan. Medicare Advantage plans to get 8.5% revenue boost in 2023. Healthcare Finance. April 4, 2022. https://www.healthcarefinancenews.com/news/medicare-advantage-plans-get-expected-85-revenue-boost-2023
5. Biniek, Jeannie Fuglestein and Neuman, Tricia. The Growth in Share of Medicare Advantage Spending. Kaiser Family Foundation. April 7, 2022. https://www.kff.org/medicare/slide/the-growth-in-share-of-medicare-advantage-spending/