Press release

CMS finalizes 2018 payment and policy updates for Medicare Health and Drug Plans, and releases a Request for Information

CMS finalizes 2018 payment and policy updates for Medicare Health and Drug Plans, and releases a Request for Information
Rate Announcement supports benefit flexibility, efficiency, and innovation in Medicare Advantage and Part D

The Centers for Medicare & Medicaid Services (CMS) today released final updates to the Medicare Advantage and Part D Prescription Drug Programs for 2018. Through these changes, CMS seeks to support benefit flexibility and efficiency that allows Medicare enrollees to choose the care that best fits their health needs.

“Medicare is committed to strengthening Medicare Advantage and the Prescription Drug Program by supporting flexibility and efficiency,” said CMS Administrator Seema Verma, MPH. “These programs have been successful in allowing innovative approaches that give Medicare enrollees options that best fit their individual health needs.”

The final policies are similar to those proposed and discussed in the Advance Notice and draft Call Letter in February but incorporate several changes in response to feedback received during the public comment period. On average, plans can expect a revenue change of 0.45 percent, though individual experiences will vary. When accounting for the expected growth in coding acuity, plans can expect a total change of 2.95 percent in revenue. Plans that improve the quality of care they deliver to enrollees will see higher updates and can grow and enhance the benefits they offer to enrollees.

The updated policies provide additional flexibility and incentives to encourage organizations to develop new plan offerings with innovative provider network arrangements that may further encourage enrollee use of and improve access to high quality health care services. CMS anticipates that the updated policies will provide an increased variety of Medicare Advantage and Part D plans for enrollees to choose from.

The policies in the Rate Announcement provide incentives for plans to submit complete encounter data. In 2018, CMS is modifying the phase-in of the use of encounter data and will use encounter data for 15 percent of the risk adjustment payment to Medicare Advantage plans.

CMS is also finalizing policies that will further combat opioid overutilization by encouraging safeguards before an opioid prescription is dispensed at the pharmacy, while preserving flexibility that will maintain access to needed medications for Medicare enrollees in the Part D prescription drug benefit. CMS believes that Medicare Advantage Organizations and Part D sponsors, working with prescribing physicians, are in the best position to identify and employ best practices and the most appropriate care management interventions for enrollees using high dosage opioids. CMS expects all Part D sponsors to focus on improving the coordination of care among these enrollees using high dosage of opioids, and in particular, Medicare Advantage plans that include prescription drug coverage should consider expanding the care management they provide enrollees.

In addition to today’s payment and policy updates for Medicare Advantage and Part D, CMS is releasing a Request for Information to welcome continued feedback on Medicare Advantage and Part D. CMS is soliciting ideas for regulatory, sub-regulatory, policy, practice and procedural changes to better accomplish transparency, flexibility, program simplification and innovation in Medicare Advantage and Part D. CMS is accepting comments on the Request for Information through April 24, 2017.

For a fact sheet on the 2018 Rate Announcement and Call Letter, please visit:

The 2018 Rate Announcement and Call Letter, and the Request for Information may viewed through: and selecting “2018 Announcement.”