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Coding differences in Medicare Advantage plans led to $33 billion in excess revenue to insurers

2025-04-07
(Press-News.org) Embargoed for release until 5:00 p.m. ET on Monday 7 April 2025   

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Below please find summaries of new articles that will be published in the next issue of Annals of Internal Medicine. The summaries are not intended to substitute for the full articles as a source of information. This information is under strict embargo and by taking it into possession, media representatives are committing to the terms of the embargo not only on their own behalf, but also on behalf of the organization they represent.   
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1. Coding differences in Medicare Advantage plans led to $33 billion in excess revenue to insurers

UnitedHealth Group received the most additional revenue, resulting in an estimated $1,863 per MA member

Abstract: https://www.acpjournals.org/doi/10.7326/ANNALS-24-01345

Editorial: https://www.acpjournals.org/doi/10.7326/ANNALS-25-00549

URL goes live when the embargo lifts            

An analysis of differential coding patterns between Medicare Advantage (MA) and Traditional Medicare (TM) plans estimated how much coding differs between insurers and how much extra revenue insurers receive as a result. The analysis found that because of coding differences, the average MA risk score in 2021 was .19 higher than the average TM risk score and MA plans received an estimated $33 billion in additional revenue, with $13.9 billion, or 42% of the total, going to UnitedHealth Group. The study is published in Annals of Internal Medicine.  

 

MA plans are paid more for sicker members and less for healthier members, providing an incentive for MA plans to report as many diagnoses as legitimately possible. Prior reports have shown that MA plans report diagnoses more intensely than TM, and past research has found large differences in coding between MA and TM. According to the authors, however, no research to date has estimated the extent to which each MA insurer codes differentially or the amount of extra revenue each insurer receives.

 

Researchers from University of California San Diego and colleagues studied data from the Centers for Medicare and Medicaid Services (CMS) Chronic Conditions Data Warehouse (CCW) from 2015 to 2020 and the Master Beneficiary Summary Files from 2015 to 2021 to provide insurer-specific estimates of the effects of differential coding on risk scores and revenues. The core analytic sample included 697 contracts that were active in 2021. To measure contract-level differential coding, the researchers analyzed the effects of “persistence” and “new incidence” on risk scores. Persistence is defined as the percentage of members coded with a diagnosis in year 1 that persisted in year 2, and new incidence refers to the percentage of members with a diagnosis in year 2 that was not recorded in year 1. The researchers calculated persistence and new incidence statistics for members who were continuously enrolled in a single MA contract or continuously enrolled in TM for 24 months for 5 cohorts of beneficiaries: 2016–2017, 2017–2018, 2018–2019, 2019–2020, and 2020–2021. They used the average persistence and cumulative new incidence statistics for each contract to estimate the effect of differential persistence and new incidence rates on the 2021 risk score. The researchers identified the top 10 diagnostic groups that account for virtually all of the difference between MA and TM risk scores and calculated the average persistence and cumulative new incidence separately for them. To estimate the effects of differential coding and payment received by MA plans, the researchers assumed MA plans do not adjust their bids in response to differential coding. With this assumption, differential coding results in additional payment to plans because the rebate that the plan receives is larger if the plan codes intensely. 

 

The researchers found that the average MA risk score was 18.5% higher than the average TM risk score. For the top 10 diagnostic groups, persistence in MA averaged 78.1% compared to 72% in TM, and cumulative new incidence was 46% in MA compared to 33% in TM. The average MA risk score was .19 higher than it would have been if MA and TM had identical persistence and new incidence rates. Persistence and new incidence rates varied across insurers, with UnitedHealth Group’s average 2021 risk score .28 higher than it would have been if persistence and new incidence had been at TM levels, substantially larger than the MA industry average of .19. Differential coding resulted in an estimated $33 billion in additional payments to MA plans in 2021, and UnitedHealth accounted for $13.9 billion of that total. Differential coding resulted in a $1,863 increase in revenue per UnitedHealth member, substantially greater than the industry average of $1,220. Because the effects of differential coding vary across insurers, any MA payment policy reform targeting differential coding would have disparate effects across insurers. 

 

Media contacts: For an embargoed PDF, please contact Angela Collom at acollom@acponline.org. To speak with corresponding author Richard Kronick, PhD please email Yadira Galindo at y2galindo2@ucsd.edu. 

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2. ER visits attributable to semaglutide can be very serious but are uncommon

Most adverse effects include gastrointestinal symptoms

Abstract: https://www.acpjournals.org/doi/10.7326/ANNALS-24-03258 

URL goes live when the embargo lifts            

A study of emergency department (ED) visits from a nationally representative network of hospitals found that semaglutide adverse events can be very serious but are uncommon. Researchers estimate that less than 4 ED visits occur for every 1,000 patients prescribed semaglutide, most often for gastrointestinal symptoms.  The findings are published in Annals of Internal Medicine.

 

Researchers from the Centers for Disease Control and Prevention (CDC) and Harvard Medical School studied data from The National Electronic Injury Surveillance System–Cooperative Adverse Drug Event Surveillance (NEISS-CADES) project to identify cases of ED visits clinicians attributed to semaglutide adverse events by adults aged 18 and older between 1 January 2022 and 31 December 2023, the two years after semaglutide obtained FDA approval. Out of 551 cases identified through NEISS-CADES, researchers estimated there were 24,499 ED visits that were attributed to semaglutide adverse events, with 82% of these ED visits occurring in 2023, mostly for nausea, vomiting, abdominal pain, and dehydration. According to the researchers, this study should help patients and doctors better understand the full range of side effects of semaglutide and should inform patient-doctor discussions about whether to initiate semaglutide treatment.

 

Media contacts: For an embargoed PDF, please contact Angela Collom at acollom@acponline.org. To speak with corresponding author Pieter A. Cohen please email pcohen@challiance.org.

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3. Experts debate management of patient with decreased bone density

This ‘Beyond the Guidelines’ feature is based on a discussion held at the General Medicine Grand Rounds on 14 November 2024

Abstract: https://www.acpjournals.org/doi/10.7326/ANNALS-25-00474  

URL goes live when the embargo lifts            

In a new Annals “Beyond the Guidelines” feature, two bone endocrinologists debate how to manage a 65-year-old female patient with both osteopenia and osteoporosis on bone densitometry in the context of the American College of Physicians updated guidance on the pharmacologic treatment of osteoporosis. One of the recommendations is that clinicians take an individualized approach regarding whether to start pharmacologic treatment with a bisphosphonate in females over the age of 65 with osteopenia to reduce the risk of fractures.

 

The first discussant, Elaine W. Yu, MS, MMSc, is an Associate Professor of Medicine at Harvard Medical School and a member of the Division of Endocrinology at Massachusetts General Hospital in Boston, Massachusetts. Dr. Wu notes that most fractures occur among patients with osteopenia, and it is important to identify individuals who would benefit most from treatment using clinical judgement and the Fracture Risk Assessment Tool (FRAX). Dr. Yu recommends bisphosphonates for individuals with osteopenia who require pharmacologic treatment and alternative therapies like raloxifene for those at lower risk. She advises all patients with osteopenia to take daily calcium and vitamin D supplements and receive an annual fracture risk evaluation. When fracture risk is below the recommended threshold for pharmacologic intervention, Dr. Yu recommends a focus on lifestyle strategies over pharmacologic treatment and repeat bone densitometry in 3 to 5 years.

 

The second discussant, Alan O. Malabanan, MD, is a Clinical Associate Professor of Medicine at Chobanian & Avedisian School of Medicine and a member of the Division of Endocrinology, Diabetes, Nutrition & Weight Management at Boston University in Boston, Massachusetts. Dr. Malabanan notes that most patients with decreased bone density who fracture bones have osteopenia and that waiting for osteoporosis to develop before initiating treatment misses an opportunity for prevention. He notes non-osteoporotic patients with existing vertebral or hip fractures may also benefit from pharmacologic treatment. Based on fracture risk, Dr. Malabanan recommends alendronate, estrogen, and raloxifene as reasonable treatment options.

 

All “Beyond the Guidelines” features are based on selected clinical conferences at Beth Israel Deaconess Medical Center (BIDMC) and include multimedia components published in the Annals of Internal Medicine. 

 

Media contacts: For an embargoed PDF, please contact Angela Collom at acollom@acponline.org. To speak with corresponding author Howard Libman, MD, please email Kendra McKinnon at kmckinn1@bidmc.harvard.edu.

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Also new this issue:

Standardization and Prediction to Control Confounding: Estimating Risk Differences and Ratios for Clinical Interpretations and Decision Making

A. Russell Localio, PhD, et al.

Research and Reporting Methods

Abstract: https://www.acpjournals.org/doi/10.7326/ANNALS-25-00082

 

Epilepsy

K. Babu Krishnamurthy, MD, MBE

In the Clinic

Abstract: https://www.acpjournals.org/doi/10.7326/ANNALS-25-00494

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[Press-News.org] Coding differences in Medicare Advantage plans led to $33 billion in excess revenue to insurers