The Centers for Medicare & Medicaid Services (CMS) proposes updates and changes to the methodologies used to pay Medicare Advantage (MA) plans. The agency said the proposed updates will maximize competition among MA and Part D plans.

CMS released Part 2 of the 2021 Advance Notice last week along with a proposed rule that updates MA and the Medicare prescription drug benefit program. It released Part 1 of the 2021 Advance Notice in January and detailed changes to how it intends to calculate the Hierarchical Condition Categories (HCC) risk adjustment model and the use of encounter data.

Here are the highlights of the Part 2 notice:

  1. If finalized, MA plans will receive less than a 1 percent pay increase. CMS expects that payment to MA plans will increase by 0.93 percent in 2021 compared to 2020. The figure doesn’t include an adjustment for underlying coding trends, however. The agency expects those trends would increase risk scores, on average, by 3.56 percent.
  2. CMS proposes new measures for Star ratings. MA plans could face new measures for end-stage renal disease measures, prior authorizations, physical functioning activities of daily living patient-reported measure, and initial opioid prescribing. CMS is proposing a generic drug utilization measure for Part D plans.
  3. There won’t be a call letter in 2021. CMS announced it will not publish a call letter for 2021. Instead, it plans to publish the guidance it usually provides in the call letter in the 2021 and 2022 MA and Part D proposed rule. CMS said it will separately issue Part C and Part D bidding instructions and information that it typically provided through the call letter.

CMS will accept comments on the proposals through Friday, March 6. To submit comments or questions electronically, go to, enter the docket number “CMS-2020-0003” in the “search” field, and follow the instructions for ‘‘submitting a comment.’’ The agency will publish the final 2021 rate announcement by Monday, April 6.