CMS boosts Medicare HMO payment rates

April 4, 2006 at 12:45 PM
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WASHINGTON, April 4 (UPI) -- The Centers for Medicare & Medicaid Services announced a 4-percent rate increase Tuesday for Medicare Advantage plans.

The average rate increase is the result of several factors used to determine annual increases in the plans' payment rates, including the current year growth in Medicare costs for all Medicare beneficiaries of 3.6 percent and the phase-out of the budget neutrality adjustment in Medicare Advantage payments.

Nearly 7 million beneficiaries are currently enrolled in Medicare Advantage plans, including both Medicare Advantage-only plans and Medicare Advantage-prescription drug plans that include Medicare prescription-drug benefits.

Enrollment in Medicare Advantage has increased by about 1 million since enrollment in the drug benefit began, according to CMS.

About 5.7 million beneficiaries in Medicare Advantage receive Medicare prescription coverage through Medicare Advantage-Prescription Drug plans.

The plans offer a wider range of benefits than traditional Medicare at a lower cost, CMS Administrator Mark McClellan said.

Opponents of Medicare managed-care plans say they are actually more expensive to the government per person than traditional fee-for-service Medicare and seniors often find themselves in need of treatments that are not covered by the plans.

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