In Latest Report to Congress, MedPAC Maintains MA Plans Are Overpaid

Serving as a timely companion to its comment letter on the 2023 Advance Notice for Medicare Advantage and Part D plans, the Medicare Payment Advisory Commission (MedPAC) on March 15 released its 2022 March Report to the Congress: Medicare Payment Policy. The first of two annual reports containing policy recommendations, it echoed many of MedPAC’s prior points regarding MA plan reimbursement, namely that plans are overpaid for delivering services at below the cost of fee-for-service (FFS) Medicare.

MedPAC observed that MA plan bids continue to trail FFS, with the average plan bid coming in at 15% below FFS Medicare costs for 2022. When accounting for coding intensity, Medicare payments to MA plans this year will average 104% of FFS spending, like 2021, MedPAC estimated. In other words, “Medicare currently pays 4% more to MA plans for the average enrollee than it would have had that enrollee remained in traditional fee for service,” explained MedPAC Executive Director Jim Mathews, Ph.D., during a March 15 press briefing on the new report.

© 2022 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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