Health Affairs January 29, 2020
In the Deficit Reduction Act of 2005, Congress gave the Centers for Medicare and Medicaid Services (CMS) the statutory authority and obligation to implement a “coding intensity adjustment” for Medicare Advantage (MA) plans, to adjust for differences in patterns of diagnosis coding between MA and traditional Medicare.
Under both the Obama and Trump administrations, the coding intensity adjustment implemented by CMS has consistently been substantially smaller than justified by the data. The fiscal problem created by inadequate adjustment for coding intensity is large. Under reasonable assumptions about the rate of growth of MA coding, CMS will overpay MA plans by $200 billion over the next decade if the coding intensity adjustment remains at 5.91 percent, its current level.
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