Coding intensity refers to the difference in risk scores between enrollees in Medicare Advantage (MA) and in traditional fee-for-service (FFS) Medicare. The Centers for Medicare & Medicaid Services (CMS) assigns enrollees risk scores based on demographic factors and health status to denote the estimated relative costs of providing health care coverage (i.e., an enrollee with a risk score of 1.10 is estimated to have health care costs that are 10 percent higher than average). Payments to MA plans are risk-adjusted, meaning plans receive more payment for enrollees with higher risk scores, which encourages them to make sure patient diagnoses are thoroughly reported. Analysts find that this incentive generally leads enrollees to have higher risk scores in MA than FFS and MedPAC has raised concerns that MA plans are inflating their payments with aggressive coding practices.
