Medicare Advantage Plans Earn $33 Billion More in 2021

An analysis reveals that Medicare Advantage (MA) plans received an estimated $33 billion in additional revenue in 2021 due to differences in coding compared to Traditional Medicare (TM). The average MA risk score was 0.19 higher than the TM score, and a significant portion of this revenue went to UnitedHealth Group, which received $13.9 billion. The findings, published in the Annals of Internal Medicine, suggest that MA plans report more diagnoses than TM plans, motivated by higher payments for sicker members, thereby creating an incentive to intensively code diagnoses. Researchers analyzed data from various sources to estimate the impact of differential coding across insurers, finding that differences in persistence and new incidence rates contribute to the revenue disparities.