Medicare Compliance & Reimbursement
CMS Happy With Local Medicare Plan Applications
The Centers for Medicare and Medicaid Services has received applications from health plans seeking to offer more than 141 new local Medicare Advantage (MA) plans in 2005, the agency announced Feb. 18.
"Beginning later this year ... there will likely be more than 300 MA plans available for beneficiaries across the nation, the largest number of plans since 1999," CMS said in a statement. The trade association America's Health Insurance Plans (AHIP) said that, if all the applications are approved, patients in 39 states will have access to MA plans.
This was the last chance for applicants seeking to form new local preferred provider organizations (PPOs) before a two-year moratorium goes into effect. CMS received applications for 73 new local PPOs, as well as 55 new health maintenance organizations and 13 new private fee-for-service plans. Currently, there are 152 HMOs, 26 PPOs, and 7 PFFS plans in Medicare Advantage.
The deadline for existing MA plans to expand their service areas in 2005 is March 1. There is also an upcoming March 22 deadline for applications for regional plans, local HMOs, and stand-alone prescription drug plans that would begin serving beneficiaries on Jan. 1, 2006. One crucial question will be whether CMS receives a healthy number of regional applications, or whether the large number of local applications the agency is now trumpeting will end up being a signal that insurers prefer to cherry-pick profitable counties, leaving out the large swaths of rural America that the regions were intended to bring into MA.
CMS also announced that its preliminary estimate of the minimum percentage increase for MA plans in 2006 will be 4 percent. The agency warned that the estimate "is based on actuarial projections of fee-for-service cost growth" and could be updated before final capitation rates are announced on April 4. AHIP said the 4 percent figure demonstrates that the Medicare Modernization Act of 2003 "provides a viable platform for private sector participation in the program."
Medicare Compliance & Reimbursement
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