An updated analysis of coding pattern differences in Medicare Advantage

The intensity of diagnostic coding in Medicare Advantage (MA) relative to Original Medicare (OM) plays an important role in Medicare's fiscal costs due to its impact on risk adjustment payments. In this article, we provide new estimates of coding differentials that differ from other prominent estimates and incorporate recent policy changes.

CMS staff recalculated payment year 2022 national average enrollment-weighted risk scores for MA and OM using the newly implemented v28 risk adjustment model and a demographic-only risk adjustment model. Following the demographic estimate of coding intensity methodology, we estimate the difference in risk scores due to differences in health status between MA and OM.

Using a comparable methodology as other widely cited research, we estimate 1.5%-2.0% of "uncorrected" coding in MA relative to OM in 2022 after accounting for statutorily mandated payment adjustments and recent changes to the MA risk adjustment model.

Compared with alternative estimates of roughly 10%, our lower estimated uncorrected coding in MA suggests that prior policy actions may have affected federal spending in MA. These findings can help inform discussion of the overall fiscal balance between MA and OM.