Similar Chronic Condition Rates in MA, FFS Beneficiaries Raise Concerns About Overpayments to MA Plans

The similar prevalence of 4 out of 5 chronic conditions analyzed among Medicare Advantage (MA) and fee-for-service (FFS) Medicare beneficiaries suggests that differences in diagnosis and coding practices, rather than disparities in disease burden, may be driving higher payments to MA plans, according to a study published in the Annals of Internal Medicine.1

MA plans receive a monthly capitated fee based on beneficiaries’ risk scores, which CMS adjusts to account for underlying medical complexity2; this discourages plans from enrolling only the healthiest people. These plans have received widespread criticism from policymakers, partly due to concerns about the accuracy of risk score calculations.1 Some argue that the federal government overpays MA plans billions of dollars annually.

Previous studies indicate that MA beneficiaries tend to have higher diagnosis-based risk scores than FFS Medicare enrollees. However, it remains unclear whether these differences are due to genuine variations in patient complexity or are artificial differences caused by "upcoding" practices used by MA plans to secure higher payments from the federal government.

As MA enrollment grows, the researchers emphasized the need to determine the accurate burden of chronic conditions among beneficiaries. Consequently, they compared the prevalence of 5 chronic medical conditions among MA and FFS beneficiaries. More specifically, the researchers examined the prevalence of obesity, hypertension, diabetes, chronic kidney disease, and hyperlipidemia within the 2 groups.

These findings support the claim that Medicare Advantage (MA) payments may be driven more by diagnosis and coding practices rather than differences in disease burden between MA and fee-for-service (FFS) Medicare beneficiaries. | Image Credit: Vitalii Vodolazskyi - stock.adobe.com

They used direct physical examination and laboratory data from the National Health and Nutrition Examination Survey (NHANES), spanning 2015 to 2018. NHANES is designed to monitor the health of all noninstitutionalized individuals in the US, which it achieves by using a complex, multistage, probability sampling design to generate nationally representative population estimates.

Eligible patients included those aged 65 or older who participated in the examination portion of NHANES during this timeframe and were enrolled in either MA or FFS; the Medicare Beneficiary Summary File was used to determine Medicare enrollment status.

The researchers examined the prevalence of obesity, hypertension, hyperlipidemia, diabetes, and chronic kidney disease, with each condition defined using criteria in public health surveillance reports from the CDC and HHS. The researchers used this data to compare the age- and sex-standardized prevalence of these conditions among MA and FFS beneficiaries.

The unweighted study population consisted of 2446 individuals, 1006 of whom were MA beneficiaries and 1440 were FFS beneficiaries. This corresponded to a weighted national total of 45,426,711 individuals, of whom 15,609,672 (34.4%) were enrolled in MA and 29,817,039 (65.6%) were enrolled in FFS Medicare.

Compared with FFS Medicare beneficiaries, those enrolled in MA plans were more likely to be female (58.5% [95% CI, 55.2-61.8] vs 53.5% [95% CI, 50.9-56.2]) and have lower income (11.4% [95% CI, 7.9-15.0] vs 7.0% [95% CI, 4.9-9.1]). However, they were less likely to be White (71.7% [95% CI, 65.4-77.9] vs 81.7% [95% CI, 77.7-85.8]) and college-educated (22.4% [95% CI, 16.7-28.0] vs 36.4% [95% CI, 30.7-42.1]) than FFS Medicare beneficiaries.

The age-and sex-standardized prevalence of obesity (41.1% vs 50.6%; standardized difference [SDiff], 0.48 percentage points [pp]; 95% CI, –5.2 to 6.2) and hyperlipidemia (79.4% vs 82.3%; SDiff, –2.86 pp; 95% CI, –7.0 to 1.3) were similar among MA and FFS Medicare beneficiaries, respectively. There were also no significant differences in the prevalence of hypertension (70.9% vs 71.0%; SDiff, –0.5 pp; 95% CI, –5.8 to 5.7) and chronic kidney disease (19.2% vs 22.8%; SDiff, –3.48 pp; 95% CI, –9.2 to 2.3) between MA and FFS Medicare beneficiaries.

However, the prevalence of diabetes was higher among individuals enrolled in MA compared with those enrolled in FFS Medicare (33.3% vs 26.3%; SDiff, 7.00 pp; 95% CI, 3.3-10.7). In an interview with The American Journal of Managed Care®, Andrew S. Oseran, lead investigator and an advanced heart failure and transplant cardiologist at Beth Israel Deaconess Medical Center, discussed factors that may explain this disparity.

"I think the main driver is probably that racial and ethnic minority groups, like Black, Hispanic, and Asian populations, are all known to have a higher prevalence of diabetes, and these populations are also disproportionately enrolling in MA plans..." he said. "It's also possible that this difference in diabetes prevalence could be explained by some specific features of MA plans. Some MA plans offer supplemental benefits and they often market to specific populations. It's possible that some of these features and business strategies are attracting more patients with diabetes to enroll."

Lastly, the researchers acknowledged their study’s limitations, including that they only estimated the prevalence of 5 conditions. They noted that it is unclear whether similar patterns exist across other conditions without available NHANES examination data.

Despite their limitations, the researchers emphasized that their findings support the claim that MA payments may be driven more by diagnosis and coding practices rather than differences in disease burden between MA and FFS Medicare beneficiaries.

“Further research is needed to disentangle whether these coding differences represent more comprehensive and complete coding of beneficiaries’ medical conditions or inappropriate ‘upcoding’ by MA plans,” the authors wrote.

References

1. Oseran AS, Aggarwal R, Joynt Maddox KE, Landon BE, Wadhera RK. Prevalence of chronic medical conditions among Medicare Advantage and traditional Medicare beneficiaries. Ann Int Med. doi:10.7326/ANNALS-24-01531
2. March 2024 report to the Congress: Medicare payment policy. MedPAC. March 15, 2024. Accessed February 21, 2025. https://www.medpac.gov/document/march-2024-report-to-the-congress-medicare-payment-policy/