Coding Intensity, Favorable Selection Fuel MedPAC’s Push for MA Pay Reform

In its latest report to Congress, the Medicare Payment Advisory Commission (MedPAC) asserted that the federal government now pays approximately 22% more for Medicare Advantage enrollees than it would if they were enrolled in traditional fee-for-service (FFS) Medicare, for projected higher spending of $83 billion in 2024. That figure came in slightly below projections provided at a January meeting but higher than MedPAC’s previously estimated differences in spending, largely because it accounted for favorable selection. And while the commission said it “strongly supports the inclusion of private plans in the Medicare program,” it maintains that the current payment system is ripe for reform.

According to MedPAC’s latest Report to the Congress: Medicare Payment Policy, released March 15, the federal government in 2023 paid MA plans roughly $455 billion for serving approximately 31.6 million enrollees — 52% of Medicare beneficiaries with both Parts A and B coverage.

© 2024 MMIT
Lauren Flynn Kelly

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues, including drug benefits and specialty pharmacy, for more than a decade. She served as editor of Drug Benefit News (the predecessor to Radar on Drug Benefits) from 2004 to 2005 and again from 2011 to 2016, and now manages Radar on Medicare Advantage. Lauren graduated from Vassar College with a B.A. in English.

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