The Centers for Medicare & Medicaid Services (CMS) announced Calendar Year (CY) 2023 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the Rate Announcement).

Here are some key takeaways:

  • Announced an 8.50% expected average increase in revenue, was higher than the expectations laid out in the advanced notice of 7.98%
  • Determined that the effective growth rate will be 4.88% for 2023
  • Finalized a 0.54% average increase in Medicare Advantage star ratings
  • CMS will continue to calculate risk scores exclusively using diagnoses exclusively from MA encounter data submissions and fee-for-service (FFS) claims
  • Finalized changes to the risk adjustment model for payment to Medicare Advantage organizations for members with end-stage renal disease (ESRD)
  • CMS will continue to use the 2017 CMS-HCC model to calculate non-ESRD risk scores, the 2019 CMS-HCC ESRD models to calculate ESRD risk scores, and the 2020 RxHCC model to calculate Part D risk scores
  • Maintained the minimum coding pattern adjustment of 5.90%
  • Use of 2016–2020 risk scores to calculate the normalization factor
  • Implemented an updated version of the RxHCC risk adjustment model for Part D sponsors other than PACE

Source: U.S. Centers for Medicare & Medicaid Services (CMS)

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