In an opinion piece for The Boston Globe, Andrew Ryan and David Meyers expose the waste and fraud in Medicare Advantage, the part of Medicare administered by corporate health insurers. While our divided Congress has little power to fix massive overpayments to these insurers, they explain how the Centers for Medicare and Medicaid Services (CMS) can cut $500 billion in waste over the next decade, without jeopardizing patient care.
Ryan and Meyers explain that the waste and fraud in Medicare Advantage (MA) stem from three “big choices by CMS that allow the profiteering to go unchecked.” If the profiteering continues, it threatens to deplete the Medicare Trust Fund, endangering the Medicare program. In the meantime, it drives up Medicare premiums not only for people in Medicare Advantage but for people in Traditional Medicare, which is administered directly by the federal government.
Ryan and Meyers find that, overall, people in Medicare Advantage plans are less ill than their MA medical records indicate. Moreover, they are healthier than people in Traditional Medicare. CMS can change the way it calculates MA payments, so that Medicare Advantage plans cannot game the system and they are not overpaid.
Right now, Medicare Advantage plans do “chart reviews” of their enrollees. When they do, CMS permits Medicare Advantage plans to change their enrollees’ diagnoses codes to make them look less healthy than they are and increase their government payments.
Medicare Advantage plans also do home assessments of some of their enrollees, again with an eye to adding diagnoses codes to their medical records or otherwise making their health seem poor. Ryan and Meyers have found that ending the MA plans’ ability to change or add diagnosis codes through chart reviews and home assessments and/or prioritizing diagnosis codes from physician-patient encounters when calculating payments could reduce Medicare Advantage overpayments by $14.1 billion a year.
CMS should also be auditing Medicare Advantage plans far more often than it does to protect against overpayments. It needs resources to undertake these enforcement efforts, but they should more than pay for themselves. The IRS returns $12 for every dollar it spends on enforcement. If CMS shifted resources to enforcement, it could reduce Medicare Advantage overpayments by $10 billion a year.
Lastly, CMS should not be using the average spending on individuals in Traditional Medicare as a benchmark for payments in Medicare Advantage plans. Individuals in Traditional Medicare are in poorer health than individuals in Medicare Advantage. If CMS appropriately adjusted its benchmark to reflect these health differences, it could save more than $40 billion a year.
If CMS undertook these three fixes, it could easily save $50 billion a year. That money could go to adding an out-of-pocket limit in Traditional Medicare. But, there’s a catch.
The Republicans in Congress do not appear to care about this massive Medicare Advantage waste. The health insurance industry likely will come out strong to support Republican candidates for President and Congress if the Biden administration attempts to make these fixes. That threat tends to keep the Democrats in Congress and the Administration from acting.
Silence is not an option if we want to strengthen Medicare and keep corporate health insurers from continuing to raid its Trust Fund. Let the Biden administration’s David, take on the corporate health insurers’ Goliath. The battle to strengthen Medicare should be worth waging.
Here’s more from Just Care:
- Need home health care? Don’t count on Medicare
- Congress sits on its hands while Medicare Advantage insurers gouge taxpayers and enrollees
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
- Be a Hero tells Congress to end Medicare Advantage wrongful delays and denials of care
- OIG finds widespread inappropriate care denials in Medicare Advantage
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