|
 The cut is part of a notice issued by a division of the U.S.
Department of Health and Human Services that sets premium rate
benchmarks for Medicare Advantage plans. It reflects a 1.7 percent
increase in healthcare spending as well as payment rates for factors
such as health plan quality ratings, health reform costs, and
sicker-than-average customers.
Analysts and actuaries said some of these factors were worse than
expected but added the proposal appeared to be near industry
forecasts for a proposal that was about flat with 2015.
"It was probably just slightly worse, but it takes the uncertainty
away," Leerink Partners analyst Ana Gupte said. Shares will probably
not get a "big pop" on Monday morning, but it does clear the way for
investors, she said.
Shares of insurers that provide these plans, such as UnitedHealth
Group Inc, Humana Inc and Aetna Inc, were mostly unchanged in
after-hours trading on Friday.
The insurance industry's biggest lobbyist, America's Health
Insurance Plans, urged the health agency not to make any cuts to
payments, saying it would risk benefit cuts and higher costs for
seniors. Aetna said in a statement that the move could cause some
plans to exit certain geographic markets.
Last year, insurers said the government cuts resulted in a 3 percent
decline in payments or more, depending on where the plans were
located and how sick their patients were. Insurers were able to
negotiate the government down from its initial proposed high
single-digit percentage cut, and Gupte said it was likely insurers
would be able to lobby for changes this year as well ahead of the
final policy that is due out April 6.
[to top of second column] |
Under the Affordable Care Act, the government must cut payments for
Medicare Advantage to make them on par with the broader Medicare
fee-for-service program.
One positive for insurers, analysts and actuaries said, is that the
agency said it would not modify its payments related to home health
assessments done by insurers.
A negative factor is that the government plans to fully phase in a
new method of paying insurers whose customers are sicker than
average, they said. HHS documents showed this as being a 1.7 percent
decrease in payments in 2016.
"The fact that the agency provided leniency on the home risk
assessments is a good thing. However, fully phasing in the risk
adjustment model could be detrimental to some plans," said Ipsita
Smolinski, an analyst with Washington, D.C.-based research firm
Capitol Street.
When combined with other factors such as medical coding adjustments
by insurers, the payments could increase insurer revenue by 1.1
percent, the U.S. Department of Health and Human Services said.
(Reporting by Caroline Humer; Editing by Bernard Orr, David Gregorio
and Ken Wills)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
