CMS finalization of MA rates Completed: Why A New Model?

CMS’ finalization of Medicare Advantage (MA) rates are here for 2021. The methodologies used to pay MA organizations as well as All-Inclusive Care for Elderly programs and Medicare Part D plans can now be found on the CMS website in pdf form. There are a few changes you will want to know about.

CMS Risk Adjustment Rates

CMS finalization of MA rates has seen a bump of 1.66% per-capita payments. The increase comes from a .93% that was proposed back in February, but a decline from the previous years 2.53% increase. It is important to understand this increase does not reflect the current battle with the COVID-19 pandemic. Due to the 21st Century Cures Act, CMS has moved towards the transitioning of MA payments to the new risk adjustment model. The model from the fact sheet notes 75% of the risk score calculated is with the 2020 CMS-HCC model, while the other 25% of the risk score is with the 2017 CMS-HCC model. The previous model was a blend for CY 2020 of 50% of the risk score calculated with the 2020 CMS-HCC model and 50% of the risk score calculated with the 2017 CMS-HCC model.

Why the New Model?

The new risk model will help Medicare from overpaying for certain plans. In recent studies, certain MA plans upcode diagnoses, which result in making members seem sicker than they really are. With plan reports as well as encounter data the new risk adjustment model hopes to help correct these payments. In 2021 however, CMS will give MA plans a break with an adjustment to the MA coding pattern by only 5.9% (the minimum the law requires).  The adjustment will reflect the difference between diagnosis coding for MA organizations and fee for service providers.

This Rate Does Not Reflect COVID-19

Remember, this new rate does not catalog CMS’ actions related to the COVID-19 outbreak, an overview of CMS’ actions related to the outbreak for MA organizations, PACE organizations, and Part D sponsors can be found at The agency is also communicating with stakeholders, responding to inquiries through the HPMS system, and developing further guidance on issues related to the COVID-19 outbreak.


Empower Brokerage is dedicated to helping you educate your clients on the insurance they need to get the most out of life. Whether it’s through webinar training, one-on-one calls, seminars, or marketing plans. We want you to be successful. Give us a call if you have any questions 888-539-1633.

Quick Links:

• Contracting Portal
• Check out Events
 Get Customized Marketing Materials