- In a regulatory filing, DaVita Healthcare Partners (NYSE:DVA) discloses that the final 2016 Medicare Advantage (MA) benchmark payment rates issued by the Centers for Medicare and Medicaid Services (CMS) may reduce the company's Medicare Advantage rates ~2% which would negatively impact its 2016 operating income ~$50M.
- The 2% haircut is larger than the industry average reduction of ~1.25% due to the larger-than-average decline associated with CMS's modification to the risk adjustment model calculation. According to the company, firms who have invested in wellness and prevention programs for patients with chronic conditions are more negatively impacted.
- DaVita's situation contrasts significantly with Humana's, who yesterday disclosed that its MA funding change for 2016 would go up 0.8% instead of down as much as 1.75%, based on the new benchmark rates.
- Previously: Humana gets an upside on Medicare Advantage funding (April 7)