Medicare Advantage overpayments may be higher than the Medicare Payment and Advisory Commission estimates, a June study from researchers at the Los Angeles-based University of Southern California found.
In a July 13 article in Health Affairs, the authors of the study propose two short-term and one long-term fix to reduce the rate of overpayments in the program.
The study, published June 13, compared enrollees with similar health risk scores. The researchers found that enrollees with low expenses relative to their risk score were more likely to switch to Medicare Advantage plans, while those with higher expenses were more likely to remain in fee-for-service Medicare.
These differences in enrollee expenses account for more overpayments, according to the researchers.
Here are three policy suggestions for curbing overpayments in Medicare Advantage, according to the researchers:
- Altering rates for members switching from fee-for-service to MA. Overpayments could be reduced by phasing in risk adjustment payments for members who switch from fee-for-service to MA. People who switch into the program tend to have below-average expenses, according to the researchers.
- Taking a hybrid approach between risk adjustment and reinsurance. CMS could implement a reinsurance, rather than risk adjustment payment, for the highest-risk beneficiaries in Medicare Advantage.
- Redesign the risk adjustment model to more accurately predict costs. A longer-term change, CMS could overhaul the risk adjustment model to more accurately predict costs and risks for beneficiaries.
Read the full article here.