An updated analysis of coding pattern differences in Medicare Advantage.

Area of Science:

• Health Economics
• Health Policy
• Medicare Risk Adjustment

Background:

• Diagnostic coding intensity in Medicare Advantage (MA) significantly influences Medicare's fiscal costs through risk adjustment payments.
• Estimating these coding differentials is crucial for understanding the financial relationship between MA and Original Medicare (OM).

Purpose of the Study:

• To provide updated estimates of coding intensity differentials between MA and OM.
• To incorporate recent policy changes and the v28 risk adjustment model into these estimates.

Main Methods:

• Recalculated 2022 national average enrollment-weighted risk scores for MA and OM using the v28 risk adjustment model.
• Employed a demographic-only risk adjustment model to estimate health status differences.
• Applied a methodology consistent with prominent research on coding intensity.

Main Results:

• Estimated uncorrected coding intensity in MA relative to OM at 1.5%-2.0% for 2022.
• These estimates account for mandated payment adjustments and recent MA risk adjustment model changes.

Conclusions:

• The lower estimated coding intensity contrasts with alternative estimates around 10%.
• Prior policy interventions may have influenced federal spending within MA.
• Findings inform discussions on the fiscal balance between MA and OM.