Recently, the Centers for Medicare and Medicaid Services (CMS) released its
Rate Announcement of Methodological Changes for Calendar year (CY) 2024 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (
fact sheet;
press release). The Rate Announcement finalized updates to MA payment growth rates included in CMS’s
Advance Notice released earlier this year. Additionally, the Rate Announcement continues to build on several policies included in CMS’ recent 2024 Parts C and D
proposed rule that, if finalized, would together make several policy updates to MA and Part D payments.
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Background. Each year, as directed by section 1853(b)(2) of the Social Security Act, CMS provides advance notice to MA organizations regarding proposed methodological changes to annually adjusted payment rates. Notably, CMS has historically used this sub-regulatory policy process to solicit feedback on policies that would require rulemaking.
The Rate Announcement includes an updated 2.16 percent year-to-year reduction in plan payments as a result of proposed changes to the Risk Model. Despite this decrease, CMS estimates that plans will see a net 3.32 percent increase in payments overall in 2024. This announcement additionally includes updates to key MA and Part D Star Ratings, potential new measure concepts, and certain existing quality measures as a “universal foundation” to align a set of core measures across federal programs and with private payers. Notably, the Announcement includes detailed changes to the Part D program resulting from the passage of the Inflation Reduction Act (IRA).
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What’s Next? The updates included in the Rate Announcement are final. The impending publication of CMS’ 2024 Parts C and D final rule will likely include conforming changes to align with the Rate Announcement.
