Lawmakers urge more action on Medicare Advantage overpayments

Two lawmakers are asking CMS to do more to curb overpayments to the Medicare Advantage program. 

The agency is expected to release its 2025 rate notice to plans in the coming weeks. In a Jan. 25 letter to CMS Administrator Chiquita Brooks-LaSure, Sen. Elizabeth Warren and Rep. Pramila Jayapal asked the agency to include more levers to cut overpayments in the upcoming rate notice. 

The two Democrats asked the agency to reform base payments to offset favorable selection in the program. According to an analysis from the Medicare Payment and Advisory Commission, differences in who enrolls in Medicare Advantage over fee-for-service may result in $34 billion more in payments to the program in 2024 than traditional Medicare. 

MedPAC hypothesizes beneficiaries who use more medical services may self-select out of Medicare Advantage, because they perceive the program to have limited networks and possible delays in care from prior authorizations. Beneficiaries who tend to use less medical care may find MA programs cheaper. 

The senators also asked CMS to do more to cut down on the overpayments in the program, by applying a reduction in payments to account for coding intensity and by more aggressively collecting overpayments. 

Nearly every major payer has been accused of, or settled allegations of, upcoding — making patients appear sicker than they are, thereby receiving more payments from CMS. MedPAC estimates differences in coding between MA and fee-for-service Medicare will drive $54 billion in overpayments to the program in 2024. 

The Better Medicare Alliance, an insurer backed group, disputed the methodologies MedPAC used to reach the conclusions in its report. 

Ms. Warren and Ms. Jayapal also urged CMS to reform its quality bonus payment program, which provides bonuses to plans that earn a quality star rating of four or above, and increase enforcement of plans that illegally deny care. 

Read the full letter here. 

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