Medicare Advantage Enrollment and Beneficiary Risk Scores: Difference-in-Differences Analyses Show Increases for All Enrollees On Account of Market-Wide Changes

Abstract

Medicare adjusts payments to Medicare Advantage (MA) insurers using risk scores that summarize the relationship between fee-for-service (FFS) Medicare spending and beneficiaries’ demographic characteristics and documented health conditions. Research shows that MA insurers have increasingly documented conditions more thoroughly than traditional Medicare—resulting in higher payments to insurers—but little is known about what factors contribute to diverging risk scores. We apportion that divergence between market-wide increases and increases that vary with length of MA enrollment. We also examine whether effects vary across plan types and whether the enrollment duration effect is contingent upon remaining with the same insurer. Using Medicare administrative data from 2008 to 2013, we employ a difference-in-differences model to compare the growth in risk scores of Medicare beneficiaries who switch from FFS to MA to that of beneficiaries who remain in FFS. We find that the effect of MA enrollment on risk scores increased from 5% in 2009 to 8% in 2012 and that continuous enrollment in MA was associated with an additional 1.2% increase per year, regardless of continuous enrollment with an insurer. Thus, even among those who switched to MA in 2009, enrollment duration comprised less than one-third of the coding intensity difference in 2012. We also find that risk scores grew faster in areas with greater MA penetration and among Health Maintenance Organization enrollees. Overall, our findings suggest that market-wide factors contributed most to the increasing divergence between FFS and MA risk scores.

Comparing cataract surgery complication rates in veterans receiving VA and community care

“…Because the VA uses global budgeting, less attention is paid to coding due to the lack of financial incentives compared to those in CC. “Upcoding,” the practice of increased diagnostic intensity that occurs in the private sector so that health plans can receive higher payment rates, is largely absent in VA 49‐52 . Our finding that both preoperative ocular conditions and high‐risk eyes were twice as common in CC than in VA (despite the fact that complex surgery was more common in VA) is likely an artifact of VA “undercoding” and CC “upcoding” practices.…”

Trends in Characteristics of Adults Enrolled in Traditional Fee-for-Service Medicare and Medicare Advantage, 2011–2019

“…Nonetheless, in light of different rates of growth among Medicare enrollment options and changes in enrollees’ demographic makeup, our findings should stimulate interest in exploring disparities in care equity,6,17 risk scores,18 care quality,19 and care costs across types of Medicare enrollment options particularly as Medicare expansion to younger age groups is considered.…”

Medicare-Covered Services Near the End of Life in Medicare Advantage vs Traditional Medicare

“…While families may prefer to care for loved ones at home, this represents a valuable transfer from families to MA plans—median direct and indirect costs of ADRD caregiving, for example, are estimated at $150 000 over a 2-year period . This may represent an underappreciated area where payments to MA plans exceed the costs of care delivered and is concerning in light of research reporting lower satisfaction about the quality of EOL care among families of decedents with MA vs TM decedents, along with the broader debate around payments to MA plans …”