Description
- Abstract:
- A long-appreciated, but understudied, aspect of vertical integration is the ability to align incentives and enable coordination between principals and agents. We examine this dynamic in the context of vertical alignment between physicians and corporate primary care practices (CPCPs), which are often integrated with Medicare Advantage (MA) insurers. While concerns of increased coding intensity in MA are well-documented, the mechanisms that enable aggressive coding are less clear. Using hand-collected data on physician employment by CPCPs and national MA encounter data, we find that switching employment to a CPCP leads to an approximately 25% increase in MA risk score payments after 2 years and a 35% increase by 5 years. We find no evidence of increased health care utilization or an alternative risk score that uses pharmaceutical claims rather than recorded medical diagnoses. The increase in risk scores is driven by low-acuity and discretionary diagnoses. We estimate that higher risk-score payments due to integration lead to a $1.6 billion increase in annual payments from taxpayers to MA insurers.
Access Conditions
- Use and Reproduction
- All rights reserved
- Rights
- In Copyright
- Restrictions on Use
- All Rights Reserved
Citation
David J. Meyers, Jay Shroff, Yashaswini Singh, et al.,
"Corporate Practice of Medicine: Vertical Alignment and Medicare Advantage Risk Coding"
(2025).
Center for Advancing Health Policy through Research (CAHPR) Digital Collection.
Brown Digital Repository. Brown University Library.
https://doi.org/10.26300/amm6-vh76
Relations
Collection:
-
Center for Advancing Health Policy through Research (CAHPR) Digital Collection
This collection contains research outputs produced by members of the Center for Advancing Health Policy through Research (CAHPR). Collection DOI: https://doi.org/10.26300/mshb-sp27...