CMS boosts Medicare Advantage reimbursement as Dr. Oz takes over
The Centers for Medicare & Medicaid Services (CMS) announced it will substantially increase reimbursement rates for Medicare Advantage plans next year, generating $25 billion in extra revenue for insurance companies.
While Joe Biden’s administration proposed a raise of 2.23%, CMS under President Donald Trump is increasing the rate by 5.06%, more than doubling the expected amount the federal government will pay for covered services for patients enrolled in Medicare Advantage.
Stocks for large insurance companies that manage associated plans rose Monday on the news, despite a broad market downturn. By Monday evening, UnitedHealth Group, Humana and CVS Health were all seeing a boost to their stock price.
CMS made the announcement late Monday afternoon just before trading closed, writing that the increased payments will help CMS to “protect beneficiaries and taxpayers from waste, fraud, and abuse, while also driving access to high-quality, affordable healthcare through Medicare Advantage.”
“By finalizing these payment policies, CMS is ensuring that Medicare Advantage continues to offer access to critical services in an efficient, accountable manner, further strengthening the program’s ability to serve beneficiaries,” the agency added.
The shift in policy comes less than a week after Mehmet Oz, MD, was confirmed by the Senate and took over as head of CMS. The TV personality better known as “Dr. Oz” has been a long time advocate of Medicare Advantage, though he did promise the Senate he would monitor health plans for signs of illegal activity.
Oz has been criticized for his heavy investments in healthcare companies, including insurers. He promised to divest from certain holdings, in compliance with federal laws.
CMS opting to back Medicare Advantage comes as Congress mulls major cuts to federal healthcare programs, including traditional Medicare. Additionally, the U.S. Department of Justice has reportedly been investigating UnitedHealth over accusations of fraud associated with Medicare Advantage.
Medicare Advantage, also known as Medicare Part-C, is a government-funded alternative where health plans are managed by private companies.
The full announcement from CMS is available here. The new reimbursement rate will go into effect in 2026.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.