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Around the nation: CMS finalizes benchmark rate cut for MA plans


CMS last week finalized a benchmark rate cut for Medicare Advantage (MA) plans in 2025, in today's bite-sized hospital and health industry news from Georgia, Maryland, and New Jersey. 

  • Georgia: CDC issued a health alert to inform healthcare centers and the public about a confirmed human case of the bird flu. Last week, an individual working on a dairy farm in Texas tested positive for the H5N1 bird flu after developing conjunctivitis, or pink eye. The patient did not have any other symptoms and is recovering after receiving antiviral treatment. This is the second time a person has tested positive for bird flu in the United States, with the first being a patient in Colorado in 2022. So far, no additional cases have been identified, but CDC has encouraged medical providers to be on the lookout for any potential new cases. The agency also urged health departments to quickly assess any suspected cases and monitor recommended dairy farms that have confirmed or suspected bird flu outbreaks and require their workers to wear personal protective equipment. In the health alert, CDC said that analyses of viruses taken from the infected individual, cows, and birds showed only small genetic changes. "While minor changes were identified in the virus sequence from the patient specimen compared to the viral sequences from cattle, both cattle and human sequences lack changes that would make them better adapted to infect mammals," the alert said. (Irwin, The Hill, 4/6; Branswell, STAT, 4/5)
  • Maryland: CMS last week finalized a rate cut to MA plans in 2025, marking the second consecutive year the agency has reduced the benchmark rate. Under the final rule, the average payment to MA plans will increase by 3.7% next year, but the benchmark rate will decrease by 0.16%. "The finalized policies in the rate announcement and the Part D redesign program Instructions will make improvements to keep Medicare Advantage payments up-to-date and accurate, lower prescription drug costs, and ensure that people with Medicare have access to robust and affordable healthcare options," said CMS Administrator Chiquita Brooks-LaSure. However, many health insurers have pushed back against the decreased rate, saying that it doesn't account for growing medical utilization and expenses. In response to the rate cut, some insurers said they may reduce benefits, increase premiums, and decrease provider reimbursements. In particular, the nursing home industry, which is already facing financial difficulties, has expressed concerns about lower MA reimbursements. "These policies will put even more pressure on the benefits and premiums of 33 million Medicare Advantage beneficiaries who will be renewing their coverage this fall," said AHIP President and CEO Mike Tuffin. "It is important to note that the Medicare Advantage and Part D programs are already undergoing a number of significant regulatory and legislative changes." (Berryman/Tepper, Modern Healthcare, 4/1; Eastabrook, Modern Healthcare, 4/8; DeFreitas, HealthLeaders, 4/5; Tong, Fierce Healthcare, 4/3; Reuters, 4/2)
  • New Jersey: Johnson & Johnson (J&J) agreed to purchase Shockwave Medical for $13.1 billion. It's J&J's second multi-billion cardiovascular deal in the last few years, with the first being the company's $16.6 billion acquisition of Abiomed in 2022. Shockwave Medical manufactures a cardiovascular device that breaks down calcified plaque in the coronary and peripheral arteries using intravascular lithotripsy (IVL), a type of treatment that uses sonic pressure waves. IVL has been in use since the 1980s and was initially used to treat kidney stones. "Johnson & Johnson has a long history of tackling cardiovascular disease," said J&J CEO and chairman Joaquin Duato. "Acquiring Shockwave and its leading IVL technology provides a unique opportunity to accelerate our impact in cardiovascular intervention and drive greater value for patients, shareholders and health systems." The boards of both companies have already approved the deal, and it is expected to close by mid-2024, pending approval from both shareholders and regulators. (Lawrence, STAT+ [subscription required], 4/5; Murphy, ABC News, 4/5; Alund, USA Today, 4/5)

Market outlook for Medicare Advantage

Get the latest outlook on the current trends and priorities shaping the Medicare Advantage (MA) insurance market. Gain new insights based on conversations with health plan leaders, benefits brokers, consultants, and our survey of Medicare-eligible seniors. Download these ready-to-use slides today to guide your conversations about the evolving MA market.


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