Related Experiment Video
Updated: Mar 4, 2026
An R-Based Landscape Validation of a Competing Risk Model
Published on: September 16, 2022
CMS's New Risk-Adjustment Model Had Limited Impact On Medicare Advantage Benefits, 2024-25
Paul D Jacobs1, Richard Kronick2
1Paul D. Jacobs (pauljacobs@jhu.edu), Johns Hopkins University, Baltimore, Maryland.
Abstract:
To attenuate the effects of diagnostic coding by Medicare Advantage (MA) plans-a practice that increases plan payments-beginning in 2024 the Centers for Medicare and Medicaid Services adjusted its payment method to exclude some of the most differentially coded diagnoses from the risk-adjustment model used to calculate payment. MA payment is adjusted for enrollee health risk, which is determined using diagnoses submitted by MA plans, and MA plans report more diagnoses than would be reported for the same beneficiary enrolled in traditional Medicare. In this article, we assess how insurers responded to the new model (known as V28) by changing supplemental benefits, cost sharing, and enrollee premiums. We found a muted response in 2024 and 2025: 17-24 percent of the anticipated reduction in plan revenues was passed through to beneficiaries in the form of reduced benefits or increased cost sharing and premiums. Our finding that insurers largely absorbed V28's impact should be reassuring to policy makers contemplating further changes to more accurately pay MA plans.
Insights
Medicare Advantage plans largely absorbed payment model changes in 2024. Insurers passed only 17-24% of revenue impacts to beneficiaries through benefits and premiums.
Area of Science:
- Health Economics
- Health Policy
- Medical Insurance
Background:
- Medicare Advantage (MA) plans use diagnostic coding to influence payment.
- Differential coding practices by MA plans increase plan payments.
- The Centers for Medicare and Medicaid Services (CMS) implemented a new payment model (V28) in 2024 to address this.
Purpose of the Study:
- To assess insurer responses to the V28 payment model changes.
- To evaluate how changes in supplemental benefits, cost-sharing, and premiums occurred.
- To determine the extent to which revenue impacts were passed to beneficiaries.
Main Methods:
- Analysis of insurer responses to the V28 risk-adjustment model.
- Examination of changes in supplemental benefits, cost sharing, and premiums for 2024-2025.
- Quantification of revenue reduction passed to beneficiaries.
Main Results:
- Insurers showed a muted response to the V28 model in 2024-2025.
- 17-24% of anticipated revenue reductions were passed to beneficiaries.
- This was observed through reduced benefits or increased cost sharing and premiums.
Conclusions:
- Insurers largely absorbed the financial impact of the V28 payment model adjustments.
- This suggests a degree of stability in MA plan offerings despite payment reforms.
- Findings may inform policymakers considering future adjustments to MA payment models.
More Related Videos
06:55Inverse Probability of Treatment Weighting Propensity Score using the Military Health System Data Repository and National Death Index
Published on: January 8, 2020
07:31Implementation of a Real-Time Psychosis Risk Detection and Alerting System Based on Electronic Health Records using CogStack
Published on: May 15, 2020
Related Concept Videos
01:15Methods of Documentation VI: Case Management Model
For example, a patient with a chronic...
01:23Types of Biopharmaceutical Studies: Controlled and Non-Controlled Approaches
Non-controlled studies, commonly employed for initial exploration, lack a control group, rendering them susceptible to biases and external influences. In contrast,...
01:15Impact of Pharmacokinetic–Pharmacodynamic Models: Regulatory Decisions
01:29Issues And Trends In Healthcare Delivery System
Cost Containment
Payment for healthcare services has historically promoted adoption of costly and often unnecessary or inefficient...
01:12Relative Risk
01:30Health Information Technology and Healthcare Information System
Health Information Technology, commonly called HIT, integrates advanced information systems and technology in healthcare settings. Its primary functions include: