The most recent published MA rate projections suggest that the lower-than-expected cost experience for 2022 evident in the Direct Contracting National Reference Population - has not yet been accounted for in MA rates. We believe that CMS will account for this change as part of the 2024 Advance Notice and, all else equal, could drive a material (mid single digit %) headwind to 2024 MA rates. While other MA rate variables may partially or wholly mitigate this headwind, the retrospective adjustment headwind is expected to be historic nonetheless.

In this Wakely Brief we explore the potential connection between the 2022 Direct Contracting program Retrospective Trend Adjustment and 2024 MA Rates.

Connecting the Dots: Potential Implications of the 2022 Direct Contracting Retrospective Trend Adjustment on 2024 MA Benchmark Rates