Industry-Wide and Sponsor-Specific Estimates of Medicare Advantage Coding Intensity

Abstract

Using recently released data for 2018 and 2019, we update previously released estimates of the effects of the differences between Medicare Advantage (MA) and Traditional Medicare (TM) coding patterns on MA risk scores and on Medicare spending. We estimate that the average MA risk score in 2019 was 20% higher than it would have been if MA and TM coding patterns were identical, a substantial increase from the 16% estimate in 2017. We estimate that total Medicare payments to MA will be $600 billion higher over the 2023-2031 period than they would be if the coding intensity adjustment were set to the empirically justified level, rather than remaining at the statutory minimum. There is substantial heterogeneity across sponsors in the rate of increase in risk scores. Among the ten sponsors with the largest 2019 enrollment, average risk scores increased by substantially more than average at UnitedHealth, Anthem Blue Cross, Cigna, Centene, and InnovaCare, and by substantially less than average at Aetna and Kaiser.

Keywords: Risk Coding, Medicare Advantage, Federal Budget

JEL Classification: H51, H62, I13, I18