Apr 7, 2020 - Health

Feds relax Medicare Advantage regulations amid pandemic

Medics wheel a coronavirus patient on a gurney outside a hospital emergency room.

An older coronavirus patient at a New York City hospital. Photo: Tayfun Coskun/Anadolu Agency via Getty Images

Federal payments to Medicare Advantage companies will increase by 1.66% in 2021, and several of the insurance program's policies are being waived or changed due to the coronavirus outbreak, the Centers for Medicare & Medicaid Services said Monday.

The bottom line: Medicare Advantage continues to grow at a lofty rate, and the Trump administration is protecting those health insurers through the pandemic and into next year.

By the numbers: The 1.66% payment rate hike for 2021 plans was higher than the proposed rate, but lower than what the industry got for 2020.

  • Depending on how many medical codes Medicare Advantage insurers attach to their elderly and disabled members, the average rate increase could be as high as 3.6% next year.

Between the lines: New regulatory changes, issued due to the coronavirus, are arguably more important than the payment increase.

  • CMS is "reprioritizing" audits of Medicare Advantage plans that looked for exaggerated coding — a move that will temporarily give a reprieve to the industry that feared the audits would claw back billions of dollars.
  • Companies can expand telehealth options and waive copays this year for people who are affected by the outbreak.
  • The coronavirus is making it difficult for health plans and doctors to collect quality data; therefore, the federal government will be more lenient on data requirements for 2021 and 2022, which likely will protect bonus payments that plans receive.
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