Medicare Advantage plans are paid on a formula that includes the health status of each beneficiary that enrolls. So the plans, and the physicians they often pay in an at-risk manner, have an incentive to make beneficiaries appear to have a lot of medical problems. The government is trying to address this excessive coding which has led to very high overpayments to the plans. But not identifying all of a beneficiary’s health needs can also have negative impacts. This study examines what happens when a beneficiary is coded as potentially having Alzheimer’s or another dementia. This coding group was removed from the payment formula for a time and then added back. It appears that the when this coding set was reinstated, beneficiaries reported less difficulty accessing care for a dementia and lower financial burden associated with treatment of a dementia. Encouraging plans to identify all health issues for a member is good, but they shouldn’t be paid more unless they actually are providing more treatment and better outcomes. (JAMA Study)
