Medicare Advantage Payment Accuracy:

The Current Picture

More than 35 million Americans rely on Medicare Advantage. The policies that shape their coverage — what’s funded, what’s cut, what’s reformed — should rest on accurate, current data. Yet much of today’s debate still leans on a ~10% coding intensity estimate that newer evidence contradicts: a CMS analysis puts the real gap at roughly 1.5–2.0%. When decisions this consequential are built on outdated numbers, it’s beneficiaries who bear the cost.

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MedPAC’s June report will guide Congress on Medicare Advantage payments. The methodology behind those recommendations needs close review.

Why This Matters Now

MedPAC’s June report carries significant weight with Congress, CBO, and the appropriations process. Its coding intensity estimates flow directly into payment recommendations, budget scoring, and proposed reforms. When those estimates are based on outdated methodology, the downstream policy decisions are too.

The data behind those decisions should reflect where the program is today — not where it was years ago.

What Has Changed

The MedPAC estimates most commonly cited in policy debates were generated under a risk adjustment system that no longer exists. Since those numbers were produced, CMS has overhauled the model, expanded oversight, and applied annual coding adjustments. The latest CMS analysis evaluates Medicare Advantage as it operates today.

Key Changes Since Earlier Estimates

v28 risk adjustment model: CMS redesigned how diagnoses are grouped and weighted to better reflect patient complexity and reduce coding variation. As of 2026, all Medicare Advantage risk scores are calculated under the updated model.
Annual coding intensity adjustments: CMS applies a coding intensity adjustment each year to account for known differences in coding patterns between Medicare Advantage and Fee-For-Service.
Expanded federal oversight: CMS has significantly expanded audit activity and program integrity efforts across Medicare Advantage contracts.
Updated data and methodology: The recent CMS staff analysis reflects these policy and model changes — producing findings substantially different from estimates generated under earlier systems.

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The Latest CMS Analysis

In a rigorous analysis published in Health Affairs, CMS leaders assessed 2024 data and found that the coding intensity differential is much smaller than previously estimated — just 1.5–2.0%, compared to the ~10% figure most commonly cited.

Policymaking can only be as strong as the data underpinning it, and this analysis meaningfully updates the picture.

Read the full CMS Report in Health Affairs

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What's at Stake

When policy decisions rest on outdated coding estimates, the consequences fall on beneficiaries. Medicare Advantage delivers benefits that traditional Medicare does not — and underpayments based on flawed assumptions put those benefits at risk.

Benefits Seniors Rely On

99% of Medicare Advantage beneficiaries have access to comprehensive plans offering dental, vision, hearing, and wellness benefits not available in traditional Medicare. These are funded through plan rebates that depend on accurate payment rates.

Affordability and Choices

Accurate payments support stable premiums, more plan options, and predictable benefits. Seniors in Medicare Advantage spend an average of $3,486 less annually on premiums and out-of-pocket costs compared to Fee-for-Service Medicare, and every MA plan includes an out-of-pocket maximum — a protection traditional Medicare still lacks.

Care Coordination for Chronic Conditions

Medicare Advantage plans invest in care management, chronic care programs, and provider networks designed to keep beneficiaries healthier at home. Payment cuts threaten this infrastructure.

Stability for those who can least absorb disruption

Medicare Advantage disproportionately serves low-income beneficiaries and beneficiaries of color, who are the most exposed to benefit reductions and plan exits driven by underpayment

What Others Are Saying

“This narrative has put seniors’ care at risk by driving policy decisions that threaten the very foundation of a program that works.”
— Former HHS Secretaries Tommy Thompson and Donna Shalala

“The finding is notable because it calls into question MedPAC payment recommendations and black-box models.”
— The Wall Street Journal Editorial Board

“The data on Medicare Advantage payment accuracy has changed meaningfully — and policy decisions that affect 35 million seniors should reflect where the program is today, not where it was years ago.”

— Mary Beth Donahue, President and CEO, Better Medicare Alliance

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The current picture is clearer than it’s been in years. As Congress considers the future of Medicare Advantage, the most current evidence should be at the center of that conversation.

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