In a recent press release, CMS said that benchmark payment rates for Medicare Advantage health plans will increase by 1.25% on average in 2016. When factoring in the expected growth of risk scores coded by insurers, it is expected that payments will go up 3.25% on average. CMS also said that it will calculate 2016 Medicare Advantage risk-adjustment scores entirely under an updated model, decreasing rates paid to insurers. Medicare Advantage plans use a risk-coding model to adjust for different demographics and conditions. Each beneficiary’s health status incorporates the different categories to predict their future healthcare costs, and the risk score is then multiplied by the baseline rate to determine how much a plan will receive for a specific beneficiary.
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