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Americans Increasingly Choose Medicare Advantage as Enrollment Nears 30 Million


Published Nov 28, 2022 • by AHIP

Medicare Advantage (MA) enrollment is approaching 30 million seniors and people with disabilities, approaching this important milestone as more Americans actively choosing it for their health care coverage. That is because the “whole patient” emphasis of MA consistently generates better outcomes and higher enrollee satisfaction.

Research continues to show that MA also delivers lower costs for Americans. In fact, a recent study found that, looking at comparable coverage and patient populations, original Medicare is significantly more expensive than government estimates suggest. The study demonstrates that MA is meaningfully less expensive than original Medicare, and it is saving taxpayers billions each year.

And yet, Kaiser Health News presents a misleading picture of the program, relying on limited data from long-ago, decade-old audits to make sweeping claims about MA plans that fail to provide context or explain the limits of the data.

The MA Program Is Focused on Whole-Person Care

MA and original Medicare are fundamentally different with respect to payment. MA plans receive monthly payments reflecting the estimated cost of covering hospital care, doctor visits, and other Medicare benefits, including adjustments based on diagnoses codes to account for the health of their enrollees so plans have the resources needed to cover sicker patients. This payment system encourages MA plans to consider the entire patient and how each of their clinical conditions interact. In original Medicare – a fee-for-service program - providers are paid based on procedure codes reflecting specific services delivered rather than the overall health of the patient.

MA’s approach is one key reason why the program is both successful and popular. Every MA plan is incentivized to provide comprehensive care coordination which requires understanding the complete health profile of each individual patient and person. This promotes and contributes to better health outcomes. Plans do this by reporting codes on the health status of enrollees in a comprehensive way. Doing so helps MA plans and their providers integrate care, better manage chronic conditions, improve wellness, and deliver better quality care.

MA Claims Rely on Physician Records

MA plans rely on diagnoses from hospitals and physicians to understand individual and population health. The Centers for Medicare & Medicaid Services’ (CMS) risk adjustment data validation (RADV) audits review medical records to substantiate these diagnoses but do not account for the realities of medical practice. For example, some records may lack a physician’s signature, and some physicians may fail to repeatedly document longstanding conditions (such as diabetes) while continuing to manage and treat their patients. Patients in these cases have had their conditions diagnosed, facts that the recent report fails to acknowledge.

Further, CMS bases their audit findings on subjective reviews of medical records. Coding is not an exact science; reasonable, trained professionals can interpret the same medical record in different ways.

In addition, the Kaiser Health News report includes preliminary data based on diagnosis codes that are a decade – or more – old. The appeal process for most claims has not yet occurred, and MA plans may never have a chance at fair appeals given the passage of time.

Additional Context for Audits

Another important piece of context is missing from recent reports: CMS has determined that MA has significantly lower net payment error rates than original Medicare. Original Medicare also has significant rates of unsubstantiated diagnoses for claims, and the majority of diagnosis code data submitted via original Medicare is not audited by CMS. It is important to have these comparisons, to put CMS audit findings in context.

On multiple occasions, health insurance providers have formally submitted recommendations to CMS on steps that the agency, together with plans and providers, can take to strengthen the MA program. One key approach would be for CMS to create a more open, transparent, and collaborative process for developing appropriate MA payment oversight standards and associated audits.

A Public-Private Partnership that Works for Americans

The MA program provides tremendous value for seniors and people with disabilities, as well as the federal government. While the original Medicare model creates strong incentives for overutilization and treating conditions after they emerge, under the MA program, health insurance providers bear the risk of providing all Medicare services to enrollees within a prospective, per-member, per-month payment system.

Medicare Advantage is an example of a public-private partnership that works for American patients, consumers, and taxpayers. The MA program saves money for taxpayers, and provides value for seniors and people with disabilities. Medicare Advantage boasts lower costs, greater choice, and better health outcomes – and soon, 30 million seniors and people with disabilities who have chosen MA over original Medicare.