Medicare Advantage (MA) plans report relatively more diagnoses per enrollee compared with those for similar fee-for-service enrollees, resulting in greater capitation payments. This practice, known as “upcoding,” results in excess government spending. Dual Medicare-Medicaid enrollees have increasingly enrolled in MA plans, some of which are targeted to duals. That duals are sicker and require more costly care than Medicare-only enrollees, combined with accelerated MA enrollment, suggests that upcoding practices for duals may be increasingly concerning. Using a quasi-experimental design, we estimate that upcoding leads to an 18.3 percent increase in risk scores for duals, resulting in $12.2 billion in excess spending during calendar year 2020. Comparison of our results to existing estimates that reflect all MA enrollees suggests that upcoding is disproportionately greater for duals compared with non-duals. As policies evolve to regulate plans serving duals, attention should be paid to this practice, and more aggressive measures may be required.
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