CMS reverses position on Medicare Advantage

Tuesday, April 2, 2013

BALTIMORE – No April Fools’ Day joke here: CMS announced on Monday a 3.3% increase in reimbursement rates for Medicare Advantage in 2014.

This, after originally proposing a 2.3% reduction in February.

“The policies announced today further the agency’s goal of improving payment accuracy in all our programs, while at the same time ensuring program stability and preserving beneficiary choice,” stated Jonathan Blum, acting principal deputy administrator for CMS, in a press release.

The government pays private insurance companies, which lobbied hard against the reduction, to run Medicare Advantage. About 25% of the 47 million Americans on Medicare pay more to be part of the program, according to news reports.

Shares of Humana, a major provider of Medicare Advantage plans, rose 8% in after-hours trading from a close Monday of $75.02, according to reports.