KFF November 20, 2025
Federal payments to Medicare Advantage plans are adjusted for the health status of the plans’ enrollees through a process known as risk adjustment. Generally, payments are higher for people with more health conditions and lower for people with fewer health conditions. The purpose of risk adjusting payments is to ensure Medicare Advantage plans receive sufficient payments to cover the expected costs of enrollees with more health conditions who have higher expected health care spending. However, it also provides an incentive to Medicare Advantage insurers to document the health conditions of their enrollees more comprehensively than is done for traditional Medicare beneficiaries, making Medicare Advantage enrollees look sicker and increasing payments from the federal government.
Analysis of Medicare Advantage insurers’ coding...
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