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Medicare Advantage insurers could face an average 2.3% cut to baseline payments in 2024, the Biden administration said Wednesday. If the proposal stands, it would be a net cut of more than $3 billion to the industry.

The major reason behind the proposed pay cut: Medicare officials want to update data and coding systems that are used to explain the health conditions of an insurance company’s enrollees. Under that new system, insurers would not get paid as much for members with certain diagnoses.

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