Coding intensity and the types of enrollees who select Medicare Advantage plans will drive an additional $88 billion in payments to the program in 2024 compared with what traditional Medicare would receive, according to estimates from the Medicare Payment and Advisory Commission.
At a Jan. 12 meeting, committee staff laid out its annual status report for Medicare Advantage in 2024.
The advisory group estimated that risk scores in Medicare Advantage will be 20.1% higher for patients than if they were enrolled in traditional Medicare. These higher risk scores will account for $54 billion in additional payments to Medicare Advantage plans in 2024, according to MedPACs estimates.
Nearly every major payer has been accused of, or settled allegations of, upcoding — making patients appear sicker than they are, thereby receiving more payments from CMS.
Health risk assessments and chart reviews by plans account for around half of the difference in coding between the Medicare Advantage and fee-for-service populations, according to MedPAC's estimates.
Differences between who enrolls in MA and traditional Medicare will drive $34 billion in payments to MA in 2024, MedPAC found.
According to the commission's report, beneficiaries who use more medical services may self-select out of Medicare Advantage, because they perceive the program to have limited networks and possible delays in care from prior authorizations. Beneficiaries who tend to use less medical care may find MA programs cheaper.
In 2023, 52% of eligible Medicare beneficiaries enrolled in Medicare Advantage plans, according to MedPAC's report.
Michael Chernew, PhD, chair of the commission, said at the Jan. 12 meeting that MA was not designed to be the dominant form of Medicare, but its growth reflects the value beneficiaries are getting from the program.
"That said, I think the trajectory of growing enrollment we're on is unstable, for a bunch of reasons that are sometimes mathematical, just the way that the benchmarks are set," Dr. Chernew said.
In a statement, Mary Beth Donahue, president of the insurer-backed Better Medicare Alliance, said the group is concerned about the methodologies MedPAC used to reach the conclusions in its report.
"The implications for beneficiaries, especially given that Medicare Advantage serves 51 percent of the Medicare population, including vulnerable and underserved communities, would be consequential if policymakers advanced policies without complete information and acknowledging the concerns raised in today's meeting," Ms. Donahue said.