The Centers for Medicare and Medicaid released their reimbursements rates for Medicare Advantage plans by each county in the United States. Commonly known as the capitation rate, the table shows what Medicare pays to a private Medicare Advantage plan each month for each beneficiary enrolled in the health plan. The lowest reimbursement is in San Luis Obispo County at $745.29 and the highest monthly payment is $983.73 in Alpine County. These amounts are down from 2014.
Medicare Advantage plans receive less government revenue
The method used to determine the monthly capitation amount, the reimbursement paid for each enrolled member, is complicated. Medicare Advantage plans can actually get bonus dollars per member depending on their Star Rating and other factors. A five star Medicare Advantage plan can receive an extra 5% bonus on top of the standard capitation amount each month.
Monthly capitation amounts listed in the table below do not include any reimbursement for the Part D Prescription drug plan that MA-PDs incorporate into the health plan. Part D is a separate reimbursement. These monthly amounts cover the actuarial risks to the insurance company for covering the benefits of Original Medicare Parts A and B. The column titled ESRD is the reimbursement for an enrolled member that develops End Stage Renal Disease (ESRD) and receives dialysis. PACE, Program of All-Inclusive Care for the Elderly, is a special Medicare Advantage program that is not listed along with the Special Needs Plans. This information can be found at http://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Ratebooks-and-Supporting-Data-Items/2015Rates.html?DLPage=1&DLSort=0&DLSortDir=descending
Medicare Advantage capitation amount by county
|Medicare Advantage Monthly Capitation Rates for 2015 for All Plans Except PACE Plans
Note:1. ESRD rates are for dialysis only and are shown after the deduction of user fee of $5.25.
2. All rates include MIPPA IME deduction.
Risk Parts A&B
|County name||5% Bonus 2015 Rate||3.5% Bonus 2015 Rate||0% Bonus 2015 Rate||*** ESRD ***
Parts A & B
|SAN LUIS OBISPO||745.29||745.29||745.29||7389.86|
New bonus program for 2015
It’s difficult to compare the reimbursements from 2014 to 2015 because Medicare has changed the bonus program from strictly a Star Rating basis to a simpler format of 0%, 3.5% or 5% bonus program. The new Quality Bonus Program is part of the Affordable Care Act to stabilize Medicare expense growth. Overall, Medicare Advantage plans will realize a reduction in the monthly reimbursement rate anywhere from 3% to 15% between 2014 and 2015. (Difference is between a 5 Star rate in 2014 and the 5% bonus rate in 2015.) Some of this reduction may evaporate as there is an added rebates for plans that can increase their Star Rating and curb the plans administrative expenses among other items.
Tim Courtney, FSA, MAAA Senior Consulting Actuary, Wakely Consulting, Inc. sums up the challenge to Medicare Advantage plans under the new ACA reimbursement methodology.
The reforms in the 2010 Affordable Care Act set out to reduce Part C payments to Medicare Advantage Organizations; however the impact of these reductions has not been felt yet due to the Quality Bonus Demonstration. As the ACA reforms continue to phase in for 2014, and the QBP demonstration expires in 2015, MA plans will face unprecedented Part C revenue reductions, barring any regulatory change or new demonstration. Looking beyond 2015, the revenue outlook for MA plans should stabilize, and by 2017 should behave more like the year-to-year changes experienced prior to 2011.
In order to emerge successfully from these upcoming challenges, plans will need to focus with more diligence than ever on changing factors it can control like the star rating, expense trend, administrative expenses, and diagnosis coding. Plans that are not able efficiently manage these factors will struggle to maintain a competitive plan offering. More than ever, it could make the difference between being a successful MA plan and one that is not in the MA market at all.
Medicare Advantage Revenue Part C by Wakely Consulting and Medicare 2015 County Rate spreadsheet with all counties listed and a comparison of California 2015 vs. 2014 reimbursement rates.
- 2015 KFF Issue-brief-medicare-advantage-2015-spotlight-enrollment-market-update (1.7 MiB)
- 2015 Perscription Drug Plans by State (0.4 MiB)
- 2015 U.S. MA-PD by State and County (16.9 MiB)
- KFF Medicare Advantage Enrollment By Firm 2015 (0.4 MiB)
- Medicare-Advantage-Part-C-Revenue (0.3 MiB)
- RateBook2015 (0.7 MiB)