News: Medicare Advantage plans may see reduced payments and risk scores due to COVID-19, analysis shows

A Medicare Advantage (MA) plans are likely to see a reduction in risk scores and payments due to the COVID-19 pandemic, a recent analysis conducted by Avalere found. MA risk scores are calculated by CMS using diagnosis data from claims, which are then used to adjust MA plan payments. Due to lower 2020 claims because of the pandemic, 2021 risk scores will likely be affected.

The analysis used data from 324 million claims of patients enrolled in a MA plan between January 2019 and June 2020. Due to the COVID-19 pandemic, MA enrollees with at least one claim was 47% lower in April 2020 compared to April 2019. Overall, the total number of MA claims decreased by 66% in April 2020 compared to April 2019.

For estimating the potential impact of COVID-19 on MA payments for 2021, the analysis calculated the 2020 midyear score and used that as a baseline for the initial 2021 score. This resulted in an estimated 3.5% decrease in healthcare utilization, leading to a 2.39% decrease in payment.

Analysts used three different model scenarios for assumed utilization for the final six months of 2020. With these models, risk scores could decrease 6.3%-9.6%, lower payments to MA plans up to 6.1%.

Editor’s note: The full Avalere analysis can be found here.