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The current Medicare Advantage payment structure results in overpayments

Current research states that the millions of beneficiaries in traditional Medicare who have switched to Medicare Advantage plans have lower spending than those with similar health risks. Why is this important? CMS bases payments to Medicare Advantage health plans on expenditures derived from claims data for those remaining in traditional Medicare, not data from Medicare Advantage expenditures. “The skewed distribution of expenditures and the consistent trend of beneficiaries with below-average spending choosing Medicare Advantage plans have significant financial implications and are adding to the financial strain on the Medicare system,” says Steven Lieberman, a nonresident senior fellow at the USC Schaeffer Center. To read more about overpayments to Medicare Advantage plans, click here…

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