2023 Medicare Advantage and Part D Rate Announcement (2023)

Today, the Centers for Medicare & Medicaid Services (CMS) released the Announcement of Calendar Year (CY) 2023 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the Rate Announcement). CMS’s goals for Medicare Advantage and Part D mirror our vision for the agency’s programs as a whole, which is to advance health equity; drive comprehensive, person-centered care; and promote affordability and the sustainability of the Medicare program.

In the CY 2023 MA and Part D Advance Notice, CMS solicited comments on a variety of topics, including seeking input on promoting health equity in Medicare Advantage and Part D plans. CMS appreciates the submitted comments and will consider them in future policymaking.

This fact sheet discusses the provisions of the Rate Announcement, which can be viewed by going to: https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.html and selecting “2023 Announcement.”

Net Payment Impact

The chart below indicates the expected impact of the policy changes and updates on MA plan payments relative to 2022.

Year-to-Year Percentage Change in Payment

(Video) 2023 Medicare Advantage and Part D Advance Notice Fact Sheet


2023 Advance Notice

2023 Rate Announcement

Effective Growth Rate






Change in Star Ratings



Medicare Advantage Coding Pattern Adjustment



Risk Model Revision






MA risk score trend[2]



Expected Average Change in Revenue

7.98 %


Part C Risk Adjustment

CMS will continue the CY 2022 policy to calculate 100% of the risk score using the 2020 CMS-HCC model, which was phased in from CY 2020 to CY 2022, as required by section 1853(a)(1)(I) of the Social Security Act, as amended by the 21st Century Cures Act. We are also continuing our policy of calculating risk scores for MA enrollees using diagnoses exclusively from MA encounter data submissions and fee-for-service (FFS) claims. CMS solicited and received comments on whether enhancements can be made to the CMS-HCC risk adjustment model to address the impacts of social determinants of health on beneficiary health status by incorporating additional factors that predict the relative costs of MA enrollees and will consider all comments received on this topic for future policymaking.

Part C End Stage Renal Disease (ESRD) Risk Adjustment

For CY 2023, we are finalizing the revised risk adjustment model for payment to MA organizations and additional demonstrations and programs (such as Medicare-Medicaid Plans (MMPs)) where the demonstration also uses the MA risk adjustment models) for enrollees with ESRD in order to improve the prediction of costs for these enrollees. The revised model is calibrated on more recent data, using CMS’s current approach to identify risk adjustment eligible diagnoses from encounter data records. It also incorporates improvements previously made to the Part C CMS-HCC model, specifically the clinical updates and revised segmentation, which accounts for the differential cost patterns of dually eligible beneficiaries.

Program of All-Inclusive Care for the Elderly (PACE) Risk Adjustment

For CY 2023 payment to PACE organizations, we will continue to use the 2017 CMS-HCC model to calculate non-ESRD risk scores as we have done since CY 2020, the 2019 CMS-HCC ESRD models to calculate ESRD risk scores as we have done since CY 2019, and the 2020 RxHCC model to calculate Part D risk scores as we have done since CY 2020.

(Video) AHIP Raises Concerns with Final 2023 Medicare Advantage, Part D Rate Announcement

Medicare Advantage Coding Pattern Adjustment

Each year, as required by law, CMS makes an adjustment to plan payments to reflect differences in diagnosis coding between MA organizations and FFS providers. For CY 2023, CMS is finalizing a coding pattern adjustment of 5.9%, which is the minimum adjustment for coding pattern differences required by statute. CMS received a number of recommendations from stakeholders regarding approaches to estimate the MA coding pattern adjustment. These included recommendations that CMS apply a higher coding pattern adjustment than the statutory minimum and that CMS consider approaches that take into account differences in coding patterns across MA plans. CMS continually reviews MA coding patterns and continues to assess how we calculate the MA coding pattern adjustment, how best to apply it, and what the appropriate level of the adjustment should be. Ensuring that the coding pattern adjustment policy appropriately addresses differential coding in MA is essential and we will consider these recommendations in the development of future coding pattern adjustment proposals.

Medicare Advantage Normalization Factor

CMS calculates normalization factors annually to keep the FFS risk score at the same average level over time. For CY 2023, CMS will use the methodology typically used for calculating the normalization factor, which is to project the payment year risk score using a trend that is based on five historical years of FFS risk scores under the payment year model. However, for CY 2023, we proposed not to update the years of FFS risk scores used in the trend as we typically do – that is to remove the earliest year’s FFS risk score and add the most recent year’s FFS risk score that is available – because of concerns that the changing use of services in 2020 due to the COVID-19 pandemic resulted in an anomalous 2021 risk score, which is based on diagnoses from 2020 dates of service. Including the anomalous 2021 risk score would result in a projection that significantly underestimates what the FFS 2023 risk score is likely to be. CMS is finalizing the proposal to not update the years in the trend and instead use the same years of FFS risk scores that were used to calculate the 2022 normalization factors, 2016 through 2020.

Part D Risk Adjustment

For CY 2023, we are finalizing our proposal to implement an updated version of the RxHCC risk adjustment model for Part D sponsors other than PACE. The RxHCC model is used to adjust direct subsidy payments for Part D benefits offered by stand-alone prescription drug plans (PDPs) and Medicare Advantage prescription drug plans (MA-PDs). The recalibrated RxHCC model includes a clinical update to the RxHCCs based on ICD-10-CM diagnosis codes rather than ICD-9-CM codes used in the prior models. The recalibrated model also includes an update to the data years (2018 diagnoses to predict 2019 costs) using the same approach we use to filter diagnoses from encounter data records for risk score calculation, including the risk adjustment allowable CPT/HCPCS codes.

(Video) How and When to Enroll in Part D

Puerto Rico

The proportion of Medicare beneficiaries who receive benefits through the MA program (as opposed to FFS Medicare) is far greater in Puerto Rico than in any other state or territory. The policies proposed and finalized for 2023 will continue to provide stability for the MA program in the Commonwealth and to Puerto Ricans enrolled in MA plans. These policies include basing the MA county rates in Puerto Rico on the relatively higher costs of beneficiaries in FFS who have both Medicare Parts A and B, continuing the statutory interpretation that permits certain counties in Puerto Rico to qualify for an increased quality bonus adjusted benchmark, and applying an adjustment to reflect the nationwide propensity of beneficiaries with zero claims.

Part C and D Star Ratings

The Rate Announcement includes information and announces updates in accordance with the Star Ratings regulations at §§ 422.164, 422.166, 423.184, and 423.186.

The Rate Announcement includes information about the date by which plans must submit their requests for review of the appeals and complaints measures data, lists the measures included in the Part C and D Improvement measures and the Categorical Adjustment Index for the 2023 Star Ratings, and lists the states and territories with Individual Assistance designations that began in 2021 from the nationwide FEMA major disaster declarations used in the definition of an affected contract for the extreme and uncontrollable circumstances adjustment for the 2023 Star Ratings.

Additionally, CMS solicited feedback in the CY 2023 Advance Notice on a number of different potential measurement concepts and methodological enhancements, including the following:

(Video) CMS Releases 2023 Medicare Cost Updates | Part A, Part B, and Part D are Changing

  • Plans to enhance current CMS efforts to report stratified Part C and D Star Ratings measures by social risk factors to help MA and Part D sponsors identify opportunities for improvement. Nearly all stakeholders supported stratified reporting, and we will begin sharing confidential stratified reports with contracts this spring.
  • The development of a Health Equity Index as an enhancement to the Part C and D Star Ratings program to summarize measure-level performance by social risk factors into a single score used in developing the overall or summary Star Rating for a contract.
  • The development of a measure to assess whether plans are screening their enrollees for health-related social needs such as food, housing, and transportation.
  • How MA organizations are transforming care and driving quality through value-based contracts with providers to use in the potential development of a Part C Star Ratings measure.

CMS will take the feedback received into consideration as we continue to explore ways to further drive health equity and high quality care.


[1] Rebasing/re-pricing impact is dependent on finalization of the average geographic adjustment index, which was not available with the publication of the CY 2023 Advance Notice.

[2] The MA risk score trend is the average increase in risk scores, not accounting for normalization and MA coding adjustments, which are shown on separate rows. The trend is calculated by using MA risk scores over the most recently available three years, calculated using the risk adjustment model to be used in the upcoming payment year. The trend is an industry average and individual plans’ experience will vary.


What is the 2023 Medicare Advantage and Part D proposed rule? ›

CMS issued its final 2023 Medicare Advantage and Part D rule that aims to expand access to care and improve health equity through lower out-of-pocket prescription drug costs and improved consumer protections, according to an April 29 press release.

What will Part D premiums be in 2023? ›

Part D Premiums

The estimated national average monthly PDP premium for 2023 is projected to be $43, a 10% increase from $39 in 2022, weighted by June 2022 enrollment (Table 2) – a rate of increase that outpaces both the current annual inflation rate and the Social Security cost-of-living adjustment for 2023.

What is the rate increase for Medicare Advantage in 2023? ›

The full Part A premium will be $506 a month in 2023, a $7 increase. Whether a beneficiary must pay the full Part A premium depends on their or their spouse's work history. Beneficiaries with Medicare Advantage plans should check with their plan for hospital charges.

What are the changes to Medicare Part D in 2023? ›

The initial deductible will increase by $25 in 2023, to $505. This means you'll pay slightly more before Medicare Part D begins paying its share if you have a plan with the highest possible deductible. After the deductible is met, you pay 25% of covered costs up to the initial coverage limit.

What is the out-of-pocket maximum for Medicare Advantage in 2023? ›

Medicare Advantage (Part C): In 2023, the out-of-pocket maximum for Part C plans is $8,300 for approved services, but individual plans can set lower limits if they wish. Part D cost sharing does not apply towards your Medicare Advantage plan's MOOP.

Do I need Medicare Part D if I have an advantage plan? ›

Yes. All SNPs must provide Medicare drug coverage (Part D). Medicare Medical Savings Account (MSA) plans combine a high-deductible insurance plan with a medical savings account that you can use to pay for your health care costs.

What is the initial coverage limit for 2023 Part D? ›

The initial coverage limit (ICL) will increase from $4,430 in 2022 to $4,660 in 2023. This means you can purchase prescriptions worth $4,660 before entering what's known as the Medicare Part D Donut Hole, which has historically been a gap in coverage.

How much will Medicare pay for prescription drugs in 2023? ›

In 2023, you'll pay:

Up to $4.15 for each generic drug. Up to $10.35 for each brand-name drug.

What is the donut hole for 2023? ›

The Medicare Part D donut hole or coverage gap is the phase of Part D coverage after your initial coverage period. You enter the donut hole when your total drug costs—including what you and your plan have paid for your drugs—reaches a certain limit. In 2023, that limit is $4,660.

What is the 2023 final rate announcement? ›

The Final Rate Announcement (formerly known as “the Call Letter”) finalized a noteworthy 8.5% average revenue increase, which is more than double the 4% increase in 2022 and reflects CMS' commitment to the stability of the MA program and the health of the more than 28 million beneficiaries enrolled in the program.

Are Medicare Advantage premiums going up? ›

The projected average premium for 2023 Medicare Advantage plans is $18 per month, a decline of nearly 8% from the 2022 average premium of $19.52. As previously announced, the average basic monthly premium for standard Part D drug coverage is projected to be $31.50, compared to $32.08 in 2022.

What is the final announcement of 2023 CMS? ›

CMS is finalizing that providers will be required to report the JW modifier beginning January 1, 2023 and the JZ modifier no later than July 1, 2023 in all outpatient settings. In the proposed rule, CMS proposed that an initial invoice for the refund to be sent to manufacturers in October 2023.

Why do doctors not like Medicare Advantage plans? ›

If they don't say under budget, they end up losing money. Meaning, you may not receive the full extent of care. Thus, many doctors will likely tell you they do not like Medicare Advantage plans because private insurance companies make it difficult for them to get paid for their services.

What is the National Base beneficiary premium for 2023? ›

The base beneficiary premium for 2023 is $32.74. This amount may change each year, so the penalty amount can also change each year. Medicare uses the current coverage year's base beneficiary premium to calculate the penalty amount.

When can Medicare Part D plans be changed? ›

From October 15 – December 7 each year, you can join, switch, or drop a plan. Your coverage will begin on January 1 (as long as the plan gets your request by December 7). Medicare Advantage Open Enrollment Period.

What is the out-of-pocket maximum on a Medicare Advantage Plan? ›

Since 2011, federal regulation has required Medicare Advantage plans to provide an out-of-pocket limit for services covered under Parts A and B. In 2022, the out-of-pocket limit may not exceed $7,550 for in-network services and $11,300 for in-network and out-of-network services combined.

What does out-of-pocket maximum mean for Medicare Advantage plans? ›

Maximum out-of-pocket: the most money you'll pay for covered health care in a calendar year, aside from any monthly premium. After reaching your MOOP, your insurance company pays for 100% of covered services. The US government sets the standard Medicare Advantage maximum out-of-pocket limit every year.

Do Medicare Advantage plans have out-of-pocket costs? ›

Medicare Advantage Plans have a yearly limit on your out-of-pocket costs for all Part A and Part B services. Once you reach this limit, you'll pay nothing for services Part A and Part B cover. Learn about these factors and how to get cost details.

What are the negatives to a Medicare Advantage plan? ›

Disadvantages of Medicare Advantage
  • Limited service providers. If you choose one of the more popular Medicare Advantage plan types, such as an HMO plan, you may be limited in the providers you can see. ...
  • Complex plan offerings. ...
  • Additional costs for coverage. ...
  • State-specific coverage.

Can I drop my Medicare Advantage plan and go back to original Medicare? ›

Yes, you can elect to switch to traditional Medicare from your Medicare Advantage plan during the Medicare Open Enrollment period, which runs from October 15 to December 7 each year. Your coverage under traditional Medicare will begin January 1 of the following year.

Can you use GoodRx instead of Medicare Part D? ›

Keep in mind that you cannot use GoodRx and insurance at the same time. However, you can use GoodRx instead of insurance or government-funded programs, such as Medicare or Medicaid, to pay for your prescription medications. GoodRx is not insurance.

Who has the cheapest Part D drug plan? ›

Humana Walmart Value Rx Plan is the cheapest Part D Rx plan in the United States with an average premium of $17.20. Unlike Original Medicare, the Humana Walmart Value Rx Plan covers most copays and deductibles.

What is the Part B deductible for 2023? ›

2023 Medicare Part B deductible

After your deductible is met, it's typical to pay 20% of the Medicare-approved amount for these services. The total 2023 Part B deductible is $226 for the year. No benefit periods apply to Part B coverage.

Is AARP Part D good? ›

Medicare Part D plans from AARP/UnitedHealthcare are widely available and get solid ratings for quality from the Centers for Medicare & Medicaid Services. Pricing for the highest-coverage option can get expensive, however, and the plans' ratings for helping members with their medications are below average.

How do I avoid the Medicare donut hole? ›

Five Ways to Avoid the Medicare Part D Coverage Gap (“Donut Hole”...
  1. Buy Generic Prescriptions. ...
  2. Order your Medications by Mail and in Advance. ...
  3. Ask for Drug Manufacturer's Discounts. ...
  4. Consider Extra Help or State Assistance Programs. ...
  5. Shop Around for a New Prescription Drug Plan.
Sep 10, 2022

Do Medicare Advantage plans cover the donut hole? ›

Some people ask: Do Medicare Advantage plans cover the donut hole? If you choose to include Medicare prescription drug coverage in your Medicare Advantage plan, it will still have a donut hole just like a regular Part D plan. Medicare Advantage does not cover any additional Part D costs during the coverage gap.

What percent of seniors choose Medicare Advantage? ›

Forty-five percent of Medicare beneficiaries are enrolled in Medicare Advantage plans in 2022, a share that is projected to rise to more than 50 percent by 2025.

Why are Medicare Advantage plans being pushed so hard? ›

Advantage plans are heavily advertised because of how they are funded. These plans' premiums are low or nonexistent because Medicare pays the carrier whenever someone enrolls.

How much is the monthly premium for Medicare Advantage plan? ›

The estimated average monthly MA plan premium for 2023 is $18, but this cost may vary significantly. Some plan premiums could be $0, while others could have premiums over $200. To join a Medicare Advantage plan, you must also be enrolled in Medicare Parts A & B.

Is there a Medicare 2023 book out? ›

If you are currently enrolled in Medicare, you should have received a printed copy of Medicare & You 2023 by the end of October, 2022. If you have not received your copy, please call 1-800-MEDICARE (1-800-633-4227) to request one.

Are most people happy with Medicare Advantage? ›

Medicare Advantage beneficiaries are extremely satisfied with their health care coverage. 98% of beneficiaries say they are satisfied with their Medicare Advantage plan, and 97% express satisfaction with their network of physicians, hospitals and specialists.

What is the most widely accepted Medicare Advantage plan? ›

AARP/UnitedHealthcare is the most popular Medicare Advantage provider with 28% of all enrollment.

Is it better to have a Medicare Advantage plan? ›

For many seniors, Medicare Advantage plans can work well. A 2021 study in the Journal of the American Medical Association found that Advantage enrollees often receive more preventive care than those in traditional Medicare. But if you have chronic conditions or significant health needs, you may want to think twice.

How do I get my $144 back from Medicare? ›

Call 1-800-MEDICARE (1-800-633-4227) if you think you may be owed a refund on a Medicare premium. Some Medicare Advantage (Medicare Part C) plans reimburse members for the Medicare Part B premium as one of the benefits of the plan. These plans are sometimes called Medicare buy back plans.

What is the Medicare cap for physical therapy in 2023? ›

For Calendar Year (CY) 2023, the KX modifier threshold amounts are: (a) $2,230 for PT and SLP services combined, and (b) $2,230 for OT services.

What is the average annual cost per Medicare beneficiary currently? ›

In 2021, the average Medicare cost per beneficiary in the US was $15,309, an increase of 6.2% or $950 from 2020. Centers for Medicare & Medicaid Services. Centers for Medicare & Medicaid Services.

How much will Part D cost in 2023? ›

The estimated average monthly premium for Medicare Part D stand-alone drug plans is projected to be $43 in 2023, based on current enrollment, a 10% increase from $39 in 2022 – a rate of increase that outpaces both the current annual inflation rate and the Social Security cost-of-living adjustment for 2023.

What are the changes to Part D in 2023? ›

Deductibles also going down

Annual deductibles in Medicare Advantage plans and stand-alone Part D prescription drug plans vary by what plan you pick and where you live. The government does set a limit on Part D deductibles. That limit is $505 for 2023, compared with $480 in 2022.

Are 2023 Part D plans available? ›

In 2023, 191 Part D Stand-Alone Drug Plans Will Be Available Without a Premium to Enrollees Receiving the Low-Income Subsidy (“Benchmark” Plans), a 4% Reduction from 2022.

What is Medicare Final Rule 2023? ›

This final rule with comment period includes payment adjustments to hospitals under the IPPS and OPPS for the additional resource costs they incur to acquire domestic NIOSH-approved surgical N95 respirators. The payment adjustments will commence for cost reporting periods beginning on or after January 1, 2023.

What is CMS proposed rule for 2023? ›

In the CY 2023 OPPS/ASC final rule, CMS is finalizing a policy of maintaining voluntary reporting of the Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery (OP-31) measure due to the ongoing COVID-19 public health emergency (PHE).

What is the donut hole for 2023 Part D? ›

The Medicare Part D donut hole or coverage gap is the phase of Part D coverage after your initial coverage period. You enter the donut hole when your total drug costs—including what you and your plan have paid for your drugs—reaches a certain limit. In 2023, that limit is $4,660.

Will new Medicare cards be issued for 2023? ›

While the rollout of new Medicare cards ended in 2019, scams about Medicare cards continue. You will not be getting an updated Medicare card this year, but scammers may try to convince you otherwise.

What is Plan G changing for 2023? ›

Medicare Supplement Insurance (Medigap) Plan F and Plan G have high-deductible versions in which beneficiaries pay a lower monthly premium in exchange for having a deductible. In 2023, the deductibles for high-deductible Plan F and Plan G are $2,700 per year. This is an increase from $2,490 in 2022.

What changes have been proposed for 2023 in shared services? ›

For 2023, split/shared visits must be billed under the NPI of the individual who provides more than 50% of total visit time. These new rules could significantly impact Medicare reimbursement for physician practices that use NPPs in facility settings.


1. CMS Fact sheet On 2024 Medicare Advantage and Part D Advance Notice
(Quality Consultant)
2. JUST IN: SHOCKING 2023 Medicare Premium Adjustments VERIFIED! 😱
(Medicare School)
3. Big Medicare Part D Changes (2023-2025) | Inflation Reduction Act of 2022
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4. Medicare Plan N Changes for 2023
5. 2023 Medicare Advantage Prep | Medicare Advantage Explained
(Strive Medicare-Making Medicare Simple.)
6. Choosing a Medicare Part D Prescription plan for 2023!
(Giardini Medicare)


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