Medicare Advantage plans will get a pay bump in 2021 of 1.66% from the Center for Medicare and Medicaid Services (CMS).

This figure is lower than the 2.53% pay raise in 2020, although higher than the original 2021 prediction of 0.93%.

The increase also applies to all-inclusive Care for the elderly programs (PACE) and Medicare Part D prescription drug plans.

Other highlights of the final rule include:

• CMS finalized how it will calculate risk scores for 2021 payments to Medicare Advantage organizations. Risk scores will be the sum of 75 percent of the risk score calculated with the 2020 CMS-Hierarchical Condition Categories model and 25 percent of the risk score calculated with the 2017 version of the model. The scores used to be the sum of 50 percent of both models.
• CMS also finalized how it will use encounter data, or diagnostic information, in the risk adjustment calculation process. CMS will calculate risk scores for payment to Medicare Advantage organizations as the sum of 75 percent of the encounter data-based risk score and 25 percent of the Risk Adjustment Processing System-based risk score.
• For 2021, CMS will apply a coding pattern adjustment of 5.9 percent — the minimum adjustment for coding intensity required.
• CMS will also exclude kidney organ acquisition costs from Medicare Advantage benchmarks. The change is effective Jan. 1, 2021.

The CY 2021 Rate Announcement may be viewed by going to: https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.html and selecting “2021 Announcement.”