JustCare

Category: Medicare

  • Attention mounts on Medicare Advantage fraud and abuse

    Attention mounts on Medicare Advantage fraud and abuse

    More Democrats and Republicans in Congress are speaking out and raising alarms about Medicare Advantage. If Republicans need to find savings to pay for their tax cuts, they need look no further than the $1 trillion in Medicare Advantage overpayments.

    A growing number of Republicans are speaking out against these massive government overpayments to Medicare Advantage insurers. At a recent Senate Finance Committee hearing, Senator Roger Marshall (KA-Rep) said: “Like Dr. Oz, I thought Medicare Advantage was a good thing when it came out. But, unfortunately, it’s been manipulated. They found loopholes to manipulate and now we’re spending probably $83 billion more a year on Medicare Advantage patients as opposed to if they had been on traditional Medicare…I hope that there’s an opportunity to fix that very broken system that friends across the aisle who speak so boldly about Medicare Advantage that they will vote for reforming it as well whenever we have that opportunity.”

    Senator Chuck Grassley (Rep-IO) has expressed similar concerns about Medicare Advantage, as have Senators Bill Cassidy (Rep-LO) and James Lankford (Rep-OK), who recognizes inappropriate denials in Medicare Advantage, which are keeping some hospitals in his state from contracting with MA insurers.

    Indeed, increasingly, hospital systems, including some of the best hospital systems in the country are dropping Medicare Advantage contracts. 

    Seventy-eight Democrats in the House of Representatives wrote HHS Secretary Kennedy and Acting CMS Administrator Carlton to express their concerns about Medicare Advantage overpayments and more.”If Republicans were serious about combating waste, fraud and abuse, they would be focused on Medicare (dis)Advantage plans,” says Representative Pramila Jayapal (CA-Dem) on MSNBC.

    Eight Democrats in the Senate sent a similar letter.

    Eileen Appelbaum, health economist at the Center for Economic and Policy Research, explains the Medicare Advantage rip-off here:

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  • When will Medicare stop letting Part D insurers drive up drug costs?

    When will Medicare stop letting Part D insurers drive up drug costs?

    The Centers for Medicare and Medicare Services, which oversees Medicare, now has authority to negotiate prescription drug prices for some Part D drugs each year. But, Christen Linke Young writes for Brookings on other Part D fixes needed to prevent insurers from driving up drug costs for their enrollees. The Trump administration just announced that it will not to make these fixes, at least for now.

    Young explains that Medicare Part D is riddled with “market failures and inefficiencies.” As a result, Medicare Part D plans promote high-priced drugs with higher copays rather than lower-cost drugs.

    Here’s the problem: Part D insurers earn more revenue when they negotiate big rebates from pharmaceutical companies offering higher-priced drugs. So, the insurers have a strong financial incentive to put drugs with the highest rebates on their formularies and keep lower-cost alternatives off their formularies. The insurers work with Pharmacy Benefit Managers, which, in the case of the largest insurers, are subsidiary companies.

    The bigger the gap between the list price of a drug and the net price (the price after rebate), the more money the PBMs can collect in rebates. As a result, many Part D on-formulary drugs have a low net price and a high list price.

    For reasons I cannot explain, Medicare pays PBMs based on a drug’s list price, not its net price. Medicare does so even if there is another lower-priced drug to treat the condition. The government also allows Part D insurers to keep lower-priced drugs off their formularies.

    Through this flawed insurance design, Part D plans can offer lower premiums and then charge high out-of-pocket costs to those enrollees needing drugs with high list prices. The $2,000 out-of-pocket cap on Part D drugs helps patients some, but not as much as it could. Part D insurers both can charge patients high copays if a drug has a high list price and can keep lower-cost alternative drugs off their formularies.

    When drug manufacturers give PBMs rebates, they often require that the PBM either keep a lower-cost alternative of that drug or another drug off the insurer’s formulary, a “rebate wall.”

    These legally permissible insurer shenanigans cause people with Part D coverage to pay a lot more for their drugs than they need to. Sometimes, it’s less expensive to go to Costco or another low-cost pharmacy for your drugs. For example, the HHS Office of the Inspector General found that Part D plans tended to keep enrollees from buying biosimilar drugs, steering them to the higher-priced biologicals at a huge cost to the Medicare program.

    Inexplicably, Congress has failed to fix these problems with Part D. CMS already has significant authority over formularies but has not exercised it to the extent needed. A Biden administration proposed rule that the Trump administration did not finalize would have required Part D plans to give enrollees “broad access to generics, biosimilars, and other lower cost drugs.” This rule could have helped prevent “rebate walls.”

    Here’s more from Just Care:

  • Medicare Advantage overpayments drive up Medicare premiums by $220 billion

    Medicare Advantage overpayments drive up Medicare premiums by $220 billion

    If Republicans are serious about eliminating government waste and protecting Medicare and Medicaid, they will end Medicare Advantage overpayments; in addition to strengthening Medicare, ending these overpayments would lower premiums for older adults and people with disabilities by $220 billion. Ending these overpayments would also add $550 billion to the Medicare Trust Fund.

    Ending government overpayments to Medicare Advantage insurers would put spending in Medicare Advantage on a level playing field with traditional Medicare. Ending overpayments would mean reducing already high MA insurer profits, not Medicare benefits. Reducing overpayments would strengthen the Medicare program.

    Here’s the data revealing the excessive costs of Medicare Advantage relative to traditional Medicare as well as the toll it is taking on the out-of-pocket health care costs of older Americans and people with disabilities and the Medicare Trust Fund. 

    Medicare overpays Medicare Advantage insurers

    • “The MA program has been expected to reduce Medicare spending since its inception—under the original incorporation of private plans in Medicare in 1985, payments to private plans were set at 95 percent of FFS payments—but private plans in the aggregate have never produced savings for Medicare, due to policies governing payment rates to MA plans that the Commission has found to be deeply flawed.”
    • According to the Medicare Payment Advisory Commission (MedPac), the program’s watchdog agency, Medicare Advantage plans cost taxpayers 20% more than traditional Medicare, amounting to a projected $84 billion in 2025.
    • The Committee for a Responsible Federal Budget reports that overpayments to MA plans will total  $1.2 trillion dollars over the next decade.
    • A report by the Wall Street Journal of roughly 2 billion diagnoses covering 84% of the nation’s MA enrollees from 2018-2021 found that MA insurers collected $50 billion in payments for diseases that doctors never diagnosed or treated.

    Medicare Advantage overpayments strips billions from the Medicare Trust Fund

    • The Committee for a Responsible Budget reports that eliminating the overpayments would save the Medicare Trust Fund $550 billion.

    Older adults and people with disabilities pay higher premiums because of Medicare Advantage

    Here’s more from Just Care:

  • Medicare adds $25+ billion to Medicare Advantage insurer coffers

    Medicare adds $25+ billion to Medicare Advantage insurer coffers

    The Centers for Medicare and Medicaid Services just announced the final rule regarding Medicare Advantage payments in 2026. Notwithstanding $83 billion in overpayments to MA insurers last year and  this year as well, the Trump Administration opted to increase insurer payments by $25+ billion in 2026.

    The payment increase of 5.06 percent is more than double the proposed increase of 2.23 percent in the Biden administration’s Advance Notice for MA payments in 2026. To be clear, increases in payments to Medicare Advantage insurers end up largely in the form of profits for the insurers, but they also allow the insurers to market “additional benefits” to people with Medicare.

    Beware: If you are enrolled in a Medicare Advantage plan and you are diagnosed with a complex and costly condition, you might not be able to see the specialists you want to see or use the hospitals you want to use. Moreover, you may face inappropriate delays and denials of care. If you want easy access to care, you should enroll in traditional Medicare.

    The serious problem with any payment increase is that the Medicare Advantage insurers are expected to be overpaid more than $1 trillion in the next 10 years. The result is that people with Medicare will be forced to pay $220 billion more in Medicare premiums over the next ten years. Medicare premiums are calculated based on program costs.

    What’s equally concerning is that the Medicare Trust Fund is projected to lose $550 billion over the next ten years as a result of government overpayments to insurers.

    The Centers for Medicare and Medicaid Services claims that the additional boost to MA insurers stems from higher costs in the last quarter of 2024.

    On a happier note, CMS is finalizing the third and last year of the proposed change to the Medicare Advantage “risk-adjustment model” for paying insurers that the Biden administration launched in 2024. The changes are intended to eliminate some of the gaming that insurers engage in to collect more from the government for their services than appropriate.

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  • 2025: Government finalizes new Medicare Advantage policies

    2025: Government finalizes new Medicare Advantage policies

    Last Friday, the Centers for Medicare & Medicaid Services (CMS) issued a final rule regarding Medicare Advantage (MA) and Medicare Prescription Drug (Part D) policy. The rule will take effect in 2026. Of note, the final rule does not call for Medicare coverage of Ozempic or other anti-obesity drugs for people seeking to lose weight, as proposed, nor does it put guardrails on insurers’ use of artificial intelligence to deny care.

    CMS chose not to finalize provisions in the Biden Administration’s proposed rule related to promoting equity, ensuring equitable access to MA services, imposing guardrails for artificial intelligence (AI) or covering anti-obesity medicines.

    The rule does require MA plans to cover inpatient hospital admissions that they approved based through a prior authorization process. MA plans have too often decided post prior authorization approval to deny coverage for inpatient admissions that they deemed, after the fact, should have been treated as outpatient admissions. MA plans can only reopen a prior approval of an inpatient admission because of fraud or administrative error.

    CMS also finalized a rule ensuring that enrollees and providers can appeal an MA denial whether it comes before, during or after a procedure.

    CMS finalized a proposal that prohibits Medicare Part D plans from charging a deductible or copay for adult vaccines that the Advisory Committee on Immunization Practices recommends. The deductible also does not apply to insulin products; and, cost-sharing for these products cannot go above $35.

    In addition, Part D plans must allow enrollees to make monthly payments for their covered drugs over the course of the year, rather than in one lump sum at the pharmacy. Effective this year, these payments cannot exceed $2,000 over the course of the year.

    Here’s more from Just Care:

  • Republicans look to end Medicare Advantage overpayments

    Republicans look to end Medicare Advantage overpayments

    More members of Congress on both sides of the aisle are looking at ways to end massive overpayments to Medicare Advantage insurers as a means of reducing federal spending, reports Peter Sullivan for Axios. Ending these overpayments should not affect people’s Medicare benefits, it would simply put spending in Medicare Advantage for each enrollee on a par with spending in Traditional Medicare. In sharp contrast, cutting Medicaid benefits would likely cause tens of millions of Americans to become uninsured or underinsured.

  • Few psychiatrists accept Medicare

    Few psychiatrists accept Medicare

    If you and your spouse are not working, you likely need to enroll in Medicare at 65. But, as with many health insurance policies, it is extremely difficult to find psychiatrists who will accept Medicare coverage, reports Eugene Rubin, M.D. for Psychiatry Today.

    A study by John Havlik et al., reported in JAMA Network, finds that just over 18,000 psychiatrists were willing to bill Medicare for their services, out of a total of more than 56,000 psychiatrists nationwide.  The number willing to bill Medicare decreased by nearly 4,000 over eight years between 2014 to 2022.  That’s a 16.8 percent decrease in the number of shrinks willing to bill Medicare. Overall, only about one in three psychiatrists take Medicare.

    The researchers could not study the number of psychiatrists who contract with Medicare Advantage plans. But, overall, fewer physicians agree to work with Medicare Advantage plans than traditional Medicare. And, Medicare Advantage plans do not tout their great mental health coverage. So, it’s more than likely that it’s even harder to see a shrink in Medicare Advantage than in traditional Medicare.

    Other research has shown that people with Medicare can wait up to six months to see a therapist. But, Medicare now covers mental health care from marriage and family therapists, mental health counselors, and drug addiction specialists, as well as psychiatrists, psychologists, psychiatric nurses and licensed clinical social workers, increasing the pool of mental health providers available for people with Medicare.

    People with employer coverage and in state health insurance plans also struggle to get insurance coverage for visits to the shrink. Fewer than three in five shrinks accept any health insurance.

    To be clear, access to Medicare coverage for visits to the shrink differs depending on where you live. In Wyoming, for example, there are just 13.8 shrinks who take Medicare for every 100,000 people with Medicare, in Mississippi, 22.1 shrinks, and Montana, 27.4 shrinks. In Rhode Island, there are 174.7 shrinks for every 100,000 people with Medicare. In nine states, there are fewer than 40 shrinks for every 100,000 people with Medicare.

    While Medicare Part B covers mental health services for people enrolled in Medicare Advantage and traditional Medicare, the federal mental health parity laws do not apply to Medicare. They should!

    Here’s more from Just Care:

  • UnitedHealth overbills the VA by hundreds of millions of dollars

    UnitedHealth overbills the VA by hundreds of millions of dollars

    At a recent Congressional hearing in Washington, Rep. Mark Takano (D-California), the top Democrat on the House Veterans Affairs Committee, directed a series of questions to the CEO of the health care company Optum, a wholly owned subsidiary of UnitedHeath Group. The exchange helped expose an alarming and growing problem in veterans’ health care in this country: massive overbilling by large, for-profit insurance conglomerates.

    Takano’s questioning was a master class, and you should watch it. You can see a taste of it here.

    What Rep. Takano exposed is that massive health care companies are enriching themselves at the expense of our nation’s Veterans.

    At issue is the Veterans’ Community Care Program, which facilitates medical care for veterans provided by health care professionals outside of the Veterans Health Administration (VHA).

    The program is administered by big health insurance companies, including Optum and TriWest. Data compiled by federal investigators shows that these insurers, often called third-party administrators (TPAs), overbill the government in a similar way that insurers selling Medicare Advantage plans do, as HEALTH CARE uncovered has reported.

    Department of Veterans Affairs Office of the Inspector General (OIG) February 2025 report.

    The investigators looked under the hood of these companies and found some real troubling signs. Their February 2025 report – published by the Department of Veterans Affairs Office of the Inspector General (OIG) – found that the VHA overpaid its TPAs by more than $1 billion between 2020 and 2024.

    The largest recipient was UnitedHealth Group’s Optum, which received overpayments of more than $105 million from 2020 to 2022. TriWest was overpaid $73.4 million from 2020 to 2023. The OIG found the overpayments were a result of the companies charging the VHA incorrect rates.

    For example, Optum reportedly overcharged the VHA by $783.4 million between 2020 and May 2024 for dental services provided by community care providers. Investigators said Optum was able to charge the extra amount because of a technicality in the contract: there was no language that specifically prevented Optum from charging the VHA more than it was reimbursing the community care provider for the service.

    It turns out this is not a new problem. An OIG report from 2021 found that providers providing care for veterans through the Community Care Program billed for higher paying evaluation and management services codes at much higher rates than other doctors in the same specialty. That’s evidence of upcoding. The report also found that providers were potentially double billing for services provided by entering additional codes already covered by a global surgery code. These additional codes cost the VA $59.6 million from between 2020 and 2022.

    Kudos to Rep. Takano for raising this important issue and his efforts to protect the integrity and solvency of the VA program and hold the insurance companies accountable.

    [This post was originally published on March 18, 2025 on Health Care un-covered.]

    Here’s more from Just Care:

  • Will Trump give his supporters the lower health care costs they want?

    Will Trump give his supporters the lower health care costs they want?

    As we know, Trump supporters, like most Americans want to see lower prices on basic necessities, like gas and eggs. They also want to see lower health care costs, reports Noam Levey for NPR.

    What could Trump do? He could lower the out-of-pocket maximum on health care costs for working people. But, that would also likely drive up people’s premiums. And, the Republicans opposed the new $2,000 a year maximum on outpatient prescription drug costs for people with Medicare.

    But, the polls indicate that, unlike 10 or 15 years ago, a lot of Trump supporters now want more government involvement to rein in health care costs. People recognize that the “free market” for health care is not their friend. People no longer think that government should stay away.

    In fact, Republicans want the government to step in and limit drug prices and hospital charges. They also want the government to regulate and restrict health care providers from going after medical debt according to recent polls. More than eight in ten support a $2,300 annual cap on medical debt collection.

    Republicans still don’t support Medicare for all. In fact, that would do most to lower their health care costs and ensure they received the health care they needed. One size fits all means that it works for everyone. Other options will not work for people in some or more instances, and there’s no telling when you buy insurance whether that restriced insurance coverage will work for you over time.

    Republicans also overall support Medicaid. Medicaid is especially critical for lower and middle income older adults who need long-term nursing home care. Yet, the House Budget resolution puts in place a plan that will likely slash Medicaid spending and with it push many people off Medicaid.

    Today, Republicans more often hold corporate health insurers, pharmaceutical companies and hospitals responsible for high costs than the government. They see the greed and profiteering in our corporate health care system.

    One poll shows that 75 percent of people who voted for Trump want the government to limit hospital charges. They also want the Trump administration to do more Medicare drug price negotiation, not less.

    Right now, Republicans in Congress are not focused on any of their supporters’ cost-cutting health care priorities. They are poised to slash Medicaid and end subsidies for plans in the state health insurance exchanges, both of which will drive up health care costs for millions.

    Here’s more from Just Care:

  • Senator Grassley takes on UnitedHealth Medicare Advantage overpayments

    Senator Grassley takes on UnitedHealth Medicare Advantage overpayments

    One moderate Republican Senator is concerned about the billions of dollars in government overpayments to UnitedHealth Medicare Advantage. Senator Chuck Grassley, who chairs the Senate Judiciary Committee, sent UnitedHealth CEO Andrew Witty a letter demanding that he release information on the company’s Medicare Advantage government billing practices.

    Countless reports and analyses show that the big Medicare Advantage insurers are overbilling Medicare to the tune of as much as $140 billion a year. The Medicare Payment Advisory Commission more conservatively estimates $83 billion in overpayments last year alone. But UnitedHealth won’t acknowledge that engaging nurses to add diagnoses to their enrollees’ medical records, even when the nurses have no clue what the diagnoses mean and perform no additional tests to determine additional diagnoses, is at the very least wrong, if not outright fraud.

    Senator Grassley wants UnitedHealth to provide Congress will lots of information about their billing practices. Grassley alleged apparent fraud, waste and abuse at UnitedHealth. In 2021, UnitedHealth allegedly benefited to the tune of $8.7 billion from overbilling the government.

    “Despite these oversight efforts, [Medicare Advantage Organizations] continue to defraud the American taxpayer, costing them billions of dollars a year … The apparent fraud, waste, and abuse at issue is simply unacceptable and harms not only Medicare beneficiaries, but also the American taxpayer,” Grassley wrote. Everyone with Medicare pays higher Part B premiums as a result of the overpayments, and the overpayments are eating into the Medicare Trust Fund.

    Grassley wants Congress to examine UnitedHealth’s training manuals, guidance documents, compliance program details, audit results and other documents.

    To be clear, UnitedHealth is the largest Medicare Advantage insurer and, consequently, likely to be reaping the greatest amount in overpayments. But, Humana, CVS Health and Anthem are also beneficiaries of these overpayments. According to the Congressional Budget Office, ending these overpayments would mean $1 trillion in savings over the next ten years.

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