Medicare Advantage Meeting Sparks Controversy Over Cost and Patient Selection

WASHINGTON, D.C. – The Medicare Payment Advisory Commission (MedPAC) recently convened to discuss its annual reports on the status of the Medicare program, including the controversial findings of its report on Medicare Advantage (MA). The discussion became heated as the commission clashed over the assessment of MA’s costliness and its implications for patients’ health and healthcare financing.

MedPAC’s MA status report revealed that the program’s payments were higher compared to the traditional fee-for-service (FFS) model, attributing the projected $82 billion difference in 2023 to MA’s greater coding intensity and favorable selection. These findings sparked debates over the equitable distribution of patients and resources between MA and FFS, raising concerns about potential financial implications for both programs.

The report also highlighted that MA had a higher coding intensity than FFS, projecting its risk scores to be 20.1 percent higher in 2023, resulting in a $47 billion difference in spending. Additionally, chart reviews and health risk assessments were identified as contributing to the overall coding intensity of MA, indicating a more comprehensive assessment of patients’ health conditions under this program.

While MedPAC’s assessment suggested that favorable selection may be responsible for a projected $32 billion in greater spending for MA than FFS, advocates for MA pointed to the program’s benefits in providing more thorough care to patients, resulting in a lower rate of avoidable hospitalizations and faster diagnosis for certain conditions compared to FFS beneficiaries.

What’s noteworthy is that MA’s increasing popularity among Medicare beneficiaries, with 52 percent enrolled in MA plans in 2024, raises questions about the overall effectiveness and appeal of the traditional FFS model. This trend highlights the need for a comprehensive analysis of the factors influencing patients’ choices and the quality of care provided under each program.

As the debate over the relative merits of MA compared to FFS continues, it is imperative for MedPAC to consider all factors in its assessment, taking into account the complexities of healthcare financing, patient demographics, and the evolving landscape of Medicare programs. Additionally, efforts to improve the traditional FFS model should be a focus for those seeking to address disparities in healthcare access and quality for all Medicare beneficiaries.