While speaking at an industry conference, United States Department of Health and Human Services (HHS) Secretary Xavier Becerra recently noted that the Department is aware of the fraud within the Medicare Advantage (MA) program and officials within the agency are reviewing public comments in response to a Request for Information on how to improve the program. Becerra noted that after reviewing public comments, the agency will put forth policies based on the evidence, potentially including changing the risk adjustment formulas.
In the MA program, the government pays private insurers certain fixed rates (that increase for sicker patients) to manage health care for their members. Therefore, people have suggested that payers are incentivized to code their patients in the MA program at higher levels, resulting in increased spending.
While the Centers for Medicare and Medicaid Services seems to be aware of the increase in spending – in spite of the fact that the MA program was designed to save the government money – the agency has yet to reduce insurers’ rates to balance out the overbilling. Instead, CMS increased MA payments by 5% in 2023.
“There are some who say there’s been a racket going on where the industry is upcoding to get greater reimbursement from Medicare. Lots of folks have looked into this,” Becerra said at HLTH 2022. “We are in the process of getting public comment from folks and scrubbing those comments to take a look at that. But it’s one of those issues where we want to continue to improve the Medicare program.”
Becerra also indicated that HHS is continuing to consider changing the way patient risk is calculated – which would result in changes in reimbursement levels for providers. “We’ll make sure the risk adjustment formulas take into account the actual care that’s being provided and pay for that care, not for care that wasn’t provided that costs more,” Becerra said.
However, despite the issues with the MA program, Becerra continues to support the program, saying “we have to make sure that the taxpayers aren’t being overcharged for the service.”
Will HHS or Congress Act First?
Congress is also aware of the issue, with various lawmakers calling for an increase in program oversight. “Medicare Advantage is an important tool for helping seniors and we want it to succeed. We’re going to continue to conduct the oversight necessary,” said Oversight and Investigations Subcommittee Chair Diana DeGette.
Senator Elizabeth Warren also had some harsh words, calling the Medicare system “hemorrhaging money on scams and frauds,” due in part to insurance companies taking advantage of the program rules to increase their bottom line – all while defrauding the government. Senator Bill Cassidy raised concerns during that same hearing about the insolvency of Medicare, saying, “we should be addressing this in a more serious fashion than we are.”