Potential PY2024 MA Tailwind - FFS Normalization Factor

Medicare Advantage (MA) plans are facing a few significant headwinds for Payment Year 2024 (PY 2024). For example, as COVID relief measures expired, there was a general decline in overall 2024 Payment Year (PY) Star Ratings across Medicare Advantage contracts. Additional variables, described in other Wakely briefs, point toward probable revenue pressure on the MA front (e.g. upcoming RADV ruling, potential for reduced benchmark rates due to suppressed FFS expenditure levels, etc.) Despite the gloomy outlook, the FFS normalization factor is one area that could result in a tailwind for 2024 MA plan revenues. This brief describes the purpose of and methodology for calculating this factor and provides some commentary on the potential for it to offset some of the aforementioned headwinds.