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CMS says managed care payment rates for 2005 could increase 6.6%

Compliance Monitor, March 31, 2004

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CMS announced March 26 that Medicare Advantage (formerly Medicare+Choice) capitation rates in 2005 are expected to increase 6.6% in accordance with new rate formulas outlined in the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA).

Capitation refers to a fixed per capita amount that is paid to a hospital, clinic, or doctor for each person served.

The announcement also includes CMS' preliminary estimates of the national growth rate used for determining the national per capita Medicare Advantage growth percentage.

In 2005, Medicare Advantage plans will see increases in their reimbursement, since all capitation rates will be the greater of the 2005 fee-for-service (FFS) county rate or the 2004 county rate increased by the 2005 minimum percentage increase.

For 2005, the minimum percentage increase is the national Medicare Advantage growth percentage, and the preliminary estimate is 6.6% for aged demographic rates. This estimate could change before the final 2005 capitation rates for all counties are announced on May 10, as required by law.

To read the entire CMS release, click here.

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