Comparing MA Payments to FFS Spending during Risk-Model Transitions

BRG professionals compared payments to Medicare Advantage (MA) plans to spending in the Medicare Fee-for-Service (FFS) program and found that the phase-in implementation of the Centers for Medicare and Medicaid Services’ (CMS) new risk adjustment model will lead to lower MA payments relative to FFS. This approach contrasts CMS estimates for annual growth in FFS spending to relatively flat payments projected for MA plans as v28 risk adjustment is phased in from 2024 to 2026. Past comparisons apply MA risk scores to both MA payments and FFS spending, masking the effect of MA risk adjustment changes that do not change FFS spending.

The paper was prepared by John Barkett, Ruth Tabak, and Gregory Johnson. The research and analyses performed in preparing this paper were sponsored by UnitedHealth Group.