Wall Street analysts have had a mixed reaction to preliminary estimates from the Centers for Medicare and Medicaid services suggesting that Medicare Advantage capitated payment rates will rise 1.38% in 2011 prior to adjustments. UBS analyst Justin Lake said the increase was “slightly below our 2.5% expectation but more than made up for by no change in risk score adjustment.” Christine Arnold of Cowen said the 2011 increase will net out to about 0.7% versus a Wall Street consensus of down 1% to 2%. “While the Street is likely to be elated by the rate announcement, Medicare Advantage medical trends are rising around 5% and rates falling shy of trend is a bad thing,” she said.
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I think mix reaction is just normal. And they all have valid points. But still, the bottom line is, it is increasing.