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Medicare Advantage payments are $76 billion above what spending would have been in fee-for-service Medicare in 2026, according to a report by the Medicare Payment Advisory Commission (MedPAC).
MedPAC, which provides Congress with policy and analysis, found this year’s projected comparison of Medicare Advantage to Medicare fee-for-service spending is lower than last year’s projection.
Coding and selection push MA benchmarks, bids and payments higher relative to what spending would have been in FFS, according to the report.
However, the V28 risk adjustment model introduced by the Centers for Medicare & Medicaid Services in 2024 has been successful in decreasing MA payments relative to fee-for-service spending.
V28 lowers coding intensity, reduces payments and gives stable supplemental benefits and high plan availability, MedPAC said.
Health plans adapted to lower payment rates in the model by lowering their projected costs and bids to about 5% below FFS spending, according to the report.
The commission is required by law to report on the status of the MA program in March of each year, which it plans to do on March 6 and 7.
In 2025, 55% of eligible beneficiaries enrolled in an MA plan.
Email the writer: SMorse@himss.org