Methodology for 'Medicare Advantage Money Grab'

For this series, the Center for Public Integrity analyzed Medicare Advantage (MA) data obtained from the Centers for Medicare and Medicaid Services (CMS). The data contained enrollment and payment information for MA contract-plans and Fee-For-Service (FFS or traditional Medicare) payment data by county, downloaded from three CMS web pages: CMS Plan Payment Data, CMS Monthly Enrollment and Fee-For-Service Data.

Brian Biles, an MD and professor in the Department of Health Policy at George Washington University, and Giselle Casillas, an MPP and senior research assistant at the GWU, offered methodology advice and helped guide parts of the analysis.

The Center used monthly enrollment data from March as enrollment remains relatively stable that month. Because of regulations in the Health Insurance Portability and Accountability Act (HIPAA), small Medicare Advantage plans with 10 or less people are omitted from the data so that patient identities remain private. These CMS public data contain no patient-level information other than aggregated enrollment figures.

We analyzed data covering 2007 to 2011. After the Center completed its analysis, CMS released 2012 data.

A key to understanding cost differences between MA and traditional Medicare lies in comparing the risk score in each plan and each county. To accomplish the comparison, MA data were weighted by insurance plan county enrollment as Fee-For-Service (FFS) risk score data was only available on the county level. Weighted risk scores were calculated by taking county total enrollment, further broken down by the MA providers’ total enrollment in that county, and weighting the risk score by that number. We weighted the payments by county enrollments, similar to methodology used by the Medicare Payment Advisory Commission (MedPAC).

To compare annual payments instead of monthly costs between MA and traditional Medicare, the weighted base payment for each county for MA plans and the FFS base payments were multiplied by twelve.

There’s more to this story. Click here to read the rest at the Center for Public Integrity.

This story is part of Medicare Advantage Money Grab. Billing errors cost taxpayers billions. Click here to read more stories in this investigation.

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Copyright 2014 The Center for Public Integrity. This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.