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CMS Releases Preliminary Growth Rates for 2009

By CQ Staff

February 22, 2008 -- Medicare Advantage plans may see a 4.8 percent increase in their per capita growth percentage rates in 2009, Medicare officials said late Friday.

The estimates are preliminary and could change before the final 2009 payment rates are announced April 7, Centers for Medicare and Medicaid Services (CMS) officials said in a news release. The notice is issued annually, 45 days before the final payment rates are announced, and includes the preliminary growth trend that affects payment rates for Medicare Advantage (MA) plans. The estimates also include other technical updates on calculations affecting payments to MA plans and Medicare prescription drug plan sponsors.

Every three years, CMS is also required to recalculate or "rebase" each county's average per capita expenditures for original Medicare services using the most recent fee-for-service spending data. In the notice released Friday, CMS said fee-for-service rates for 2009 will be rebased with more recent data, with final capitation rates for each county announced on April 7. The county capitation rates define the upper limit for payments for MA health plans.

In the notice released Friday, CMS also proposes a downward adjustment to risk scores based on a requirement in a 2006 budget savings law (PL 109-171) that CMS adjust Medicare Part C risk scores to the extent that the secretary of Health and Human Services has identified differences in coding patterns between MA plans and providers under original fee-for-service Medicare. The law provides for this adjustment for 2008, 2009, and 2010. Based on risk data from 2004–2006, CMS estimates an absolute adjustment to risk scores of 0.0375.

For Medicare prescription drug plans, the deductible in the defined standard benefit will be $295 in 2009, while the initial coverage limit will rise to $2,700 from $2,510. A beneficiary's out-of-pocket cost threshold will increase to $4,350 from $4,050. The retiree drug subsidy cost threshold will rise to $295 from $275 while the cost limit will rise to $6,000 in 2009 from $5,600 in 2008.

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