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Center for Health Policy Research, Department of Health Policy, School of Public Health and Health Services, The George Washington University


Medicare; Managed Care; Managed Care Contracting


The Health Care and Education Affordability Reconciliation Act of 2010 would make major changes to Medicare Advantage (MA) payment policies. Overall, payments to MA plans would be reduced from the current national average of 113 percent of local fee-for-service (FFS) costs to a new average of 101 percent of FFS costs. The Congressional Budget Office (CBO) has estimated that the new polices would reduce Medicare spending by $132 billion over 10 years. The new policies would set county payment benchmarks for MA plans at 115 percent, 107.5 percent, 100 percent, and 95 percent of local FFS costs depending of the relative level of FFS costs in the county. The MA plan rebate policy would be reduced from the current level of 75 percent. A new program of plan performance-based payments would increase benchmarks and rebates to plans with high performance scores. This issue brief presents analysis, using data from 2009, of the impact of these new policies on payments to private plans across the nation.

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Health Policy Commons



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