Year 2000 Medicare+Choice payment rates released; new ACR deadline set - adjusted community rate

Healthcare Financial Management, April, 1999

HCFA has announced that calendar year 2000 Medicare Choice capitation rates will reflect the national per capita Medicare Choice adjusted growth rate of 5.04 percent. Under the new rates, HCFA for the first time will use a blended payment methodology that combines national and local payment averages into one rate for each payment area. (Before the Balanced Budget Act of 1997 established new Medicare payment methods, payments to managed care plans were based almost entirely on the average fee-for-service costs of individual counties.)

In 2000, plans in 63 percent of the nation's counties will receive blended payments, with rate increases ranging from 2 to 18 percent; plans in 10 percent of counties will receive the minimum 2 percent increase because their blended amount is less than 2 percent; and plans in 27 percent of counties will receive a guaranteed "floor" payment of $401.61 per member per month, an increase of 5.73 percent. Rates vary because 2000 also will be the first year that HCFA will begin using principal inpatient diagnostic cost group (PIP-DCG) risk adjusters to modify payments to each individual plan (see "Updata," March 1999).

HCFA provides a set of tables that summarizes some of the key assumptions used in the calculation of the national per capita Medicare Choice growth percentages. Medicare Choice organizations need to understand how these calculations were derived before they submit their adjusted community rate (ACR) proposals for 2000. HCFA uses the ACR data to approve benefit and premium structures for plans serving Medicare beneficiaries. The ACR instructions for 2000 were to have been issued by mid-March. For further information on Medicare Choice 2000 payment rates, go to www.hcfa.gov/stats/hmorates/aapccpg.htm. For HFMA's updated fact sheet on the 2000 rates, call Fax-It at (800) 839-HFMA and request document 400067.

In separate news, the due date for Medicare managed care plans to file ACR data has been extended from May 1 to July 1, 1999. The two-month extension was granted to encourage health plan participation in the Medicare Choice program and still allow HCFA time to mail the November 1999 Medicare Choice beneficiary open enrollment information. HCFA Administrator Nancy-Ann Min DeParle announced the extension to the House Ways and Means Health Subcommittee during testimony she gave on February 11, 1999. To read DeParle's testimony, go to www.hcfa.gov/testimony/99_0211a.htm.>

COPYRIGHT 1999 Healthcare Financial Management Association

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