Summary: Medicare Advantage risk adjustment is failing. The goal of providing adequate resources to clinical teams to treat sicker patients has been corrupted by a system that rewards aggressive coding, not high-quality care. ACHP proposes a simpler model that ensures that risk adjustment payments reflect true patient needs and that care is provided.

 

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Under the ACHP plan, doctors and health plans spend less time and money on administrative tasks chasing diagnoses, saving taxpayers billions of dollars.

A simplified model cannot capture every rare or extremely costly condition. To safeguard patients with complex needs and prevent adverse selection, a federal reinsurance program should be established with a portion of the savings from the simplified model. Reinsurance strengthens market stability by covering rare and extremely high-cost conditions, allowing all insurers to compete to deliver high-quality care to every senior.

These recommendations come following an ACHP analysis of data from the Centers for Medicare & Medicaid Services that found that in 2023 alone, the two largest MA insurers had average risk scores 19.2% and 36.2% higher than ACHP nonprofit health plans.

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