The RUPRI Center for Rural Health Policy Analysis has released a policy brief on Evaluating Medicare Advantage Benchmark Setting Methodology on Rural Counties.
Key Findings:
- Rural counties are less likely to rank in the lower Medicare Fee for Service (FFS) spending quartiles that receive a higher percentage of the county benchmark: 41 percent of rural counties are categorized in combined quartiles 1 and 2 versus 59 percent for urban counties.
- Global caps (maximum benchmark payments based on pre-Affordable Care Act (ACA) county FFS spending) on benchmark payments are much more likely in rural counties, particularly those in the lower-spending quartiles, reducing incentives for supplemental benefits or reduced cost sharing.
Purpose
Current benchmark setting methods for Medicare Advantage (MA) plans provide incentives based on geography and quality. Plans have used these incentives to offer supplemental benefits (benefits not covered under traditional Medicare including prescription drugs, dental services, vision and hearing services, among others), or reduce cost-sharing (e.g. reduce or eliminate enrollee premiums, deductibles, and/or co-payments for services),
thereby making their plans more attractive to potential beneficiaries. However, the current methodology results in incentives that can vary widely among regions and counties. Supplemental benefits, for example, are not uniformly available across all counties.1 In recent years, the Medicare Payment Advisory Commission (MedPAC) has consistently recommended that the Centers for Medicare & Medicaid Services (CMS) adjust the benchmark setting methodology, in part to reduce the geographic variability. The purpose of this brief is to understand how the current benchmark setting process affects rural counties compared to urban counties.
