News: MA plans reap billions from more intense diagnostic coding, study finds

Medicare Advantage (MA) insurers are receiving billions of dollars in extra payments by reporting diagnoses more intensely than traditional Medicare providers, with some insurers cashing in far more than others, according to a study published by the Annals of Internal Medicine. The report analyzed coding intensities, which are risk scores that represent the extent to which coding differs among insurers, JustCoding reported.

In 2021, coding practices by MA insurers made members seem sicker, which resulted in an extra $33 billion in MA payments from the federal government. The average MA risk score was 1.26 while the average for a comparable group in traditional Medicare was 1.07, meaning MA risk scores were 0.19 higher than they would have been if insurers had used the same coding practices as traditional Medicare providers.

UnitedHealth Group, the nation’s largest MA provider, stood out for the intensity of its coding. The company’s average risk scores were 0.28 higher than they would have been if coded identically to traditional Medicare, resulting in an estimated $13.9 billion in additional payments—more than 40% of the total excess payments across MA plans that year. However, not all insurers coded as aggressively. Kaiser Permanente, for instance, only showed a slight increase in coding intensity compared to traditional Medicare, highlighting the wide variation in how insurers approach diagnosis reporting.

As MA continues to grow, now covering more than half of all Medicare beneficiaries, scrutiny will increase over how taxpayer dollars are spent and whether some insurers are misusing the system. These findings could have major implications for future Medicare payment reforms as any policy changes aimed at curbing excessive coding could hit some insurers much harder than others, potentially reshaping the MA landscape.

Editor’s note: This article originally appeared in JustCoding.