Medicare Advantage needs serious fixes; $88 billion in government overpayments must end

The Medicare Payment Advisory Commission (MedPAC), a non-partisan independent agency, last week projected $88 billion in government overpayments to Medicare Advantage in 2024 and debated the value of the program, reports Noah Tong for Fierce Healthcare. While the $88 billion projection is lower than other analysts’ projections, it is serious money that is threatening the solvency of the Medicare Trust fund, endangering the Medicare program writ large, and driving up everyone’s Medicare costs.

One MedPAC commissioner thought the MedPAC report was “too negative.” In truth, it couldn’t be negative enough, given the mountains of evidence that the Medicare Advantage plans are not only wildly overcharging the federal government but engaged in widespread and persistent delays and denials of care, while failing to disclose critical data to allow analysts to assess the quality of their coverage. And, this MedPAC commissioner did say: “There are plenty of bad things definitely that need to be improved.:

For its part, the “Better Medicare Alliance,” an advocacy organization funded by the insurers, tout the extra benefits they offer. But, these benefits, such as dental services, are often extremely limited and most people appear not to be helped by them. Before, they’re available only because of the $88 billion in overpayments the MA plans receive each year.

Another MedPAC commissioner highlighted that only people who are quite ill have serious problems with Medicare Advantage. Of course, that’s the problem, since everyone in Medicare Advantage has the coverage because they could become seriously ill. They don’t need the coverage if they’re relatively healthy.

People who are in need of care face prior authorization denials, or can’t find a specialist to see or can’t use a cancer center of excellence. People don’t think about these issues when they enroll in Medicare Advantage if they’re healthy. If they did, they would seriously consider enrolling in Traditional Medicare. Traditional Medicare has no insurer middleman second-guessing your treating physicians. Moreover, unlike Medicare Advantage, it covers your care from virtually all doctors and hospitals in the US without the need for prior authorization.

One MedPAC commissioner nailed the problem, without agreeing with his own stated conclusions:  “What conclusion should I reach: that CMS leadership is unable to oversee the MA market, or that the recent and appropriate RADV audits are totally ineffective? In fact, CMS cannot oversee 4,000 plans all operating with proprietary administrative processes, failing to provide data they are required to disclose

Gregory Poulsen, another MedPAC commissioner who is a senior vice president at Intermountain Healthcare, correctly pointed out that some MA plans do not add value and are not as good as others. Plans that are insurer-run, rather than physician/hospital run, tend to deliver poorer care which manage care to bring down spending. Some of the big insurers know how to maximize their revenue by gaming the payment system.

Today, about half of people with Medicare are enrolled in a Medicare Advantage plan, most in a UnitedHealth plan or a Humana plan, possibly undercutting competition. The program in place to improve quality is a very expensive joke, failing to assess quality effectively.

Lynn Barr, a MedPAC commissioner and founder of Caravan Health emphasized the excessive overpayments to Medicare Advantage. “I believe this is what the data shows. We have allowed MA to buy the market. That is why MA is growing. It’s not because the quality is so great. People don’t love the prior authorizations, people are leaving their plans a lot. This is not the big, lovely success everyone says it is. We continue to create policy that drives people into these plans.I think we’ve got do something to reduce these payments to MA.”

Here’s more from Just Care:

• Medicare Advantage: Denials and more denials, some deadly
• Ten ways to improve Medicare Advantage
• 2023: Five things to think about when choosing between traditional Medicare and a Medicare Advantage plan
• Why won’t the government protect people from prior authorization hell?
• UnitedHealth’s denials of critical rehab services is under investigation