Health insurers and the Biden administration are at loggerheads over whether Medicare Advantage (MA) plans will see a pay cut next year, the ramifications of which come amid increased regulatory scrutiny for the popular program.

Insurer groups and some politicians charge that the latest 2024 payment rule will wind up being a 2.27% cut to MA plans after considering risk adjustment changes and other factors. The Centers for Medicare & Medicaid Services (CMS) has pushed back, arguing that isn’t true.

The debate comes amid increasing scrutiny of MA and after CMS has proposed an overhaul to plan audits to curb overpayments.

“We think it is important not to cherry-pick the numbers,” said CMS Administrator Chiquita Brooks-LaSure during a call with reporters last week. “When we look at all the elements, we do see a net positive so an increase of little over 1%.”

At issue is the proposed advance notice released earlier this month that details the payments to MA and Part D plans for the 2024 coverage year. The proposed rule lays out the payment policies and changes to MA capitation rates for the upcoming year as well as outlining key changes to risk adjustment.

When the rule was announced Feb. 1, CMS expected a 1.03% increase for plans. The agency came to this number after factoring in a decline in payments when taking in risk adjustment changes.

Since the rule was released, the insurance industry has pushed back that it will actually result in a 2.27% cut to plans if finalized.

The advocacy group Better Medicare Alliance (BMA) said that the rule “would raise costs and cut benefits for 30 million American seniors who rely on Medicare Advantage, a vital part of Medicare,” said BMA President and CEO Mary Beth Donahue in a statement.

The insurance lobbying group AHIP told Fierce Healthcare that a series of policy changes would result in the 2.27% cut to average MA payments, not 1.03% as CMS predicted.

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