Health Affairs January 1, 2025
Abstract
Medicare Advantage (MA) plans report diagnoses more completely than they are reported in traditional Medicare. As a result, payment to MA plans is greater than it would be if coding patterns were identical in the two sectors. The Medicare Payment Advisory Commission estimates that the overpayment to MA attributable to differential coding was $50 billion in 2024. We analyzed potential changes aimed at reducing MA plan overpayments that occur as a result of differential diagnostic coding between MA and traditional Medicare—specifically, changes that would reduce payments to MA contracts that code most intensely. The contract-level equity and efficiency problems created by differential MA...
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