Providing care to 64M Americans, predominantly seniors, the Medicare Program represents nearly one quarter of the total healthcare spending in the US. A whopping 28M Medicare beneficiaries, nearly half (44%), participate in the Medicare Advantage program, whereby health insurance companies manage the participants’ health benefit.
In this model, payers are paid by Medicare a single capitation by payment for each beneficiary to fund the totality of their care. This payment is based on a combination of demographic factors and each patient’s underlying disease burden. In February 2022, the Centers for Medicare and Medicaid Services (CMS) proposed changes to the method for computing this capitation payment. If adopted, these changes significantly impact on the Medicare Advantage program, both in terms of reimbursement levels and audit risk.