Repor t to the Congress: Medicare Payment Policy | March 2021

In 2019, differences in diagnostic coding caused Medicare to pay MA plans $9 billion more than it would have spent if the same beneficiaries had been enrolled in FFS Medicare.

Excess payments to MA plans may benefit enrollees in the MA program (when used to increase the value of extra benefits offered rather than increase profits) but cost taxpayers more than if these enrollees were covered in FFS Medicare. Further, excess payments to MA plans increase fiscal pressure on the Hospital Insurance (Part A) Trust Fund as well as on the taxpayers, beneficiaries, and state Medicaid programs who pay premiums to finance the Part B program.