As MAOs Consider Benefit Cuts, Risk-Bearing Providers Should Take Heed

As Medicare Advantage and Part D sponsors prepare their bids for 2025 amid revenue challenges, benefit cuts and other changes that plans are contemplating to maintain margins will undoubtedly trickle down to Accountable Care Organizations (ACOs) and other entities that take risk in MA. As a result, risk-bearing providers should be asking tough questions of their plan partners and conducting internal analyses to understand where their revenue stands to be impacted, according to value-based care experts.   

From the transition to v28 — the new version of the Part C CMS-Hierarchical Condition Categories (HCC) model that will make it harder for plans and providers to apply more codes for risk adjustment — to increased inpatient utilization, a -0.16% drop in MA plans’ base pay and other changes, risk-bearing providers are bracing for a “perfect storm” of events in MA that will require preparation, said Zach Davis, a Wakely actuary who helps ACOs manage insurance risk, during a LinkedIn Live session recorded on April 24.