Medicare Payment Policy

the Medicare Advantage
program: status report
Chapter summary
Each year the Commission provides a status report on the Medicare
Advantage (MA) program. In 2012, the MA program included more than
3,600 plan options, enrolled more than 13 million beneficiaries, and paid MA
plans about $136 billion. To monitor program performance, we examine MA
enrollment trends, plan availability for the coming year, and payments for
MA plan enrollees relative to spending for fee-for-service (FFS) Medicare
beneficiaries. We also provide an update on current quality indicators in MA.
The MA program gives Medicare beneficiaries the option to receive benefits
from private plans rather than from the traditional FFS Medicare program. The
Commission supports private plans in the Medicare program; beneficiaries
should be able to choose between the traditional FFS Medicare program and
the alternative delivery systems that private plans can provide. Private plans,
because they are paid a capitated rate rather than on an FFS basis, have greater
incentives to innovate and use care management techniques.
The Commission has stressed the concept of imposing fiscal pressure on
providers to improve efficiency and reduce Medicare program costs. For MA,
the Commission recommended that payments be brought down from previous
high levels and that they be set so that the payment system is neutral and
does not favor either MA or the traditional FFS program. Recent legislation
C H A p t e R 13
In this chapter
• Trends in enrollment, plan
availability, and payment
• Quality in MA plans
• Conclusion
Report to the Congress: Medicare Payment Policy | March 2013
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