New Medicare Proposals for 2013 Available for Review

Ernie Shannon's picture

New Medicare polices due to begin in 2013 are available for public comment between now and March 2 according to a Centers for Medicare and Medicaid Services announcement yesterday. The payment and policy guidelines impact Medicare Advantage, Part C, and Medicare prescription drug, Part D, plans and are designed to “keep costs low and make Medicare stronger” the Centers’ Deputy Administrator Jonathon Blue said.

Earlier this month, CMS revealed that Medicare Advantage premiums dropped seven percent during the past year while enrollments in the program jumped by 10 percent. The growth far exceeds the annual membership increase of 2.47 percent the Centers is forecasting, but is believed to result more from the implementation of the Affordable Care Act in 2010 than anything else. The drop in premiums, Blue said, reflect improvements in the benefit packages available to recipients.

In order to continue that trend, the deputy administrator said the proposed guidance focuses on 1) controlling beneficiary costs and premium increases, as mentioned above, 2) lowering drug costs, 3) providing stronger Part D and Medicare Advantage plan quality, 4) reducing inappropriate overuse of prescription drugs, and 5) clarifying supplemental benefits.


Medicare Advantage originated in 1997 when beneficiaries were given the option of receiving their Medicare benefits through private health insurers rather than from the traditional Medicare Part A and Part B plans. For those individuals, the program became known as Medicare+Choice. Six years later, the compensation and business practices for insurers changed and the program’s name evolved into Medicare Advantage.

The details highlighted in yesterday’s news include changes under the Affordable Care Act that move Medicare Advantage benchmarks closer to Medicare fee-for-service costs and base part of the Medicare Advantage payment on plan quality. Final benchmarks will be issued in the 2013 Rate Announcement published on April 2. The guidelines also include direction for organizations interested in offering demonstration plans next year under the Capitated Financial Alignment Demonstration. The Centers for Medicare and Medicaid Services is seeking comments on the requirements detailed in a Medicare-Medicaid Coordination Office memorandum from January.

Another aspect of the proposals involve a coding pattern adjustment of 3.41 percent that is applied to all MA plans to account for differences between Medicare Advantage and Medicare Part A and Part B providers and to improve plan payment accuracy. Finally, there are statutory updates to the annual benefit parameters for the defined standard Part D prescription drug benefit.

The 2013 proposals, otherwise listed as an Advance Notice and draft Call Letter, can be reviewed using the following link: then click on Announcements and Documents to access the 2013 files.