Medicare Advantage Payments Get a Makeover: "No UPCODE Act" Targets Risk Adjustment Rules Starting 2026

Congress is looking at changing how Medicare Advantage plans get paid with the "No UPCODE Act." In simple terms, the government pays these private health plans more for sicker patients. This bill aims to fine-tune how they figure out just how sick someone is, a process called risk adjustment. Starting in 2026, the plan is to use two years of patient health data, instead of just one, hoping for a more accurate picture.

Recalibrating the Risk Score

So, what's changing under the hood? First, the shift to using two years of diagnostic data for risk calculations (Sec. 2) is meant to smooth out year-to-year variations and potentially give a more stable assessment of a person's long-term health needs. Think of it like looking at your average spending over two months instead of just one to get a better budget baseline. The goal is to make the payment adjustments more reflective of ongoing health conditions rather than short-term fluctuations.

Chart Reviews and Health Surveys Under Scrutiny

Here's a significant shift: the bill proposes excluding diagnoses that only come from chart reviews or those health risk assessments (HRAs) many plans ask members to fill out (Sec. 2). Currently, plans can use these tools to identify conditions, which can increase their payments. The idea here is to clamp down on diagnoses that might not reflect actual treatment or ongoing care, potentially reducing incentives for plans to 'upcode' or inflate risk scores just by digging through records or asking survey questions. However, this also raises questions: could legitimate conditions identified only through a thorough chart review or an HRA be missed, potentially leading to underpayments for plans managing genuinely complex patients? The bill directs the Secretary to figure out how to identify and verify these diagnoses, but the specifics aren't laid out.

Leveling the Coding Field?

Finally, the bill tackles the long-observed differences in how health conditions are coded between Medicare Advantage plans and traditional Medicare (Parts A & B). Starting in 2026, the Secretary must evaluate how these coding pattern differences affect risk scores and then adjust payments to account for any inflation not explained by patient health (Sec. 2). This could happen at the plan level. The aim is fairness – ensuring plans aren't paid more simply because they are more aggressive coders than doctors in traditional Medicare. How exactly this adjustment will work and how much discretion the Secretary will have is something to watch, as it could significantly impact plan payments and, potentially, the benefits or premiums members see down the line.