CMS released the new 2017 payment rates for Medicare Advantage and Part D prescription drug plans on Monday, April 4th. The rates were only raised an average of 0.85% instead of the projected 1.35%, but after a coding trend is added to the base rate factors of 2.2% the expected average change in revenue is raised to 3.05%.
These rates are a base average and payments to different companies can vary due to their eligibility for quality bonuses that rely on several different factors such as star ratings, premiums, and enrollee health.
Payment rates are adjusted to promote greater health of enrollees and also to help control costs for the Medicare Advantage program. Historically Medicare Advantage beneficiaries have been more expensive for the government to fund than traditional Medicare beneficiaries.