Medicare Advantage Capitation Rates

What would happen if Medicare Advantage capitation rates were sliced 20% across the board?

How would that affect the financial performance of your organization?

Can’t happen, you say?

The Office of the Inspector General estimates that 20% of the revenue Medicare Advantage pays out in capitation is fraudulent.  The trustees recently identified it as an existential threat to the program.

The system is too complex for False Claims Act prosecutions and qui tam actions to make a dent, so CMS is going to have to take another tact.

They already adjust everyone’s capitation down more than 5% due to over-coding—look for that tool to increase in importance.

Of course, That just means that everyone will be pushed to submit more and more questionable risk codes to make up the difference—but there are only so many codes you can submit before the data is so obviously massaged that even a jury would see it.

That’s why you can’t just address the coding aspect of the Medicare Advantage payment system.  You have to address every leverage point in the system.

Grow your panel.

Submit your data.

Take good care of your patients.

That way, when the capitations cuts grow, your high performing system will shrug it off.