Medicare Advantage Risk Assessments Driving Billions In Costs Each Year

Medicare Advantage plans have come under fire for upcoding that can increase the payouts they receive, and regulators point to health risk assessments as a likely culprit in this increase in coding intensity.

A new study published this week in Health Affairs adds to the body of evidence around these assessments. The analysis, led by researchers at Brown University, dug into encounter data from 2019 and found that 44.4% of Medicare Advantage beneficiaries had received at least one health risk assessment.

Within the group that had undergone a risk assessment, hierarchical condition categories (HCC) scores increased by 12.8%, and more than one in five of these enrollees had at least one additional diagnosis captured in the risk assessment.

The researchers then modeled scenarios where the risk score impact of these assessments was restricted, and estimated that in 2020 alone it could have led to between $4.5 billion and $12.3 billion in reduced Medicare spending each year.

“Although not all HRAs may be used solely for the purpose of coding intensity, our study suggests that some limits on their use for capturing diagnosis codes may be warranted to ensure a level playing field and appropriate stewardship of taxpayer dollars as the MA program continues to expand,” they wrote.

Other analyses have raised questions about health risk assessments and the role they may be playing in driving up Medicare Advantage payouts. The Department of Health and Human Services Office of Inspector General issued a brief in late 2021 that also pointed to MA plans using risk assessments and chart reviews to increase payments.

The OIG report suggested these measures led to $9.2 billion in overpayments.

Medicare Payment Advisory Commission has recommended that health risk assessments be banned from risk adjustment to even out payments.

The Health Affairs study and the 2021 OIG analysis both note that use of health risk assessments varies widely between contracts. The HA analysis found that the contracts with the highest impact on coding intensity had lower medical loss ratios, lower scores and were less likely to have zero-dollar premiums.


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