Medicare Advantage Industry Intensifies Lobbying Over Efforts to Curb Their Massive Fraud

by | Mar 23, 2023 | Politics, Corruption & Criminality

Image: Tast Nawarat, iStockphoto

Medicare Advantage Industry Intensifies Lobbying Over Efforts to Curb Their Massive Fraud

by | Mar 23, 2023 | Politics, Corruption & Criminality

Image: Tast Nawarat, iStockphoto

New payment rules by Medicare to curb fraud by "Medicare Advantage" insurance companies have been met by a flood of misleading dishonest lobbying to counter those rules.

In the wake of numerous studies and investigations detailing the staggering level of fraud in the privately run Medicare Advantage program, the Biden administration proposed a new rule aimed at cracking down on upcoding—a common industry practice whereby plans describe patients as sicker than they actually are to reap larger payments from the federal government.

The rule, finalized by the Centers for Medicare and Medicaid Services (CMS) earlier this year, sparked a furious lobbying blitz that has only intensified in recent weeks, with the for-profit insurance industry’s most powerful players leading the fight against the proposal and other policy changes that they have falsely characterized as Medicare Advantage “cuts.”

The New York Times reported Wednesday that insurance industry executives and lobbyists have been “flooding Capitol Hill” in an effort to protect their lucrative business model, which often leaves patients without necessary care.

“The largest insurers, including UnitedHealth Group and Humana, are among the most vocal, according to congressional staff, with UnitedHealth’s chief executive pressing his company’s case in person,” the Times reported. “Doctors’ groups, including the American Medical Association, have also voiced their opposition.”

The insurance industry has also taken to the media, using sponsored content to launch misleading attacks on the Biden administration’s reforms.

In addition to the proposed crackdown on Medicare Advantage upcoding and overbilling—an effort that federal health officials estimate will recover $4.7 billion in improper payments over the next decade—the Biden administration is pushing for technical changes to the formula used to calculate Medicare Advantage payments.

Under the proposed changes, the Kaiser Family Foundation (KFF) has noted, “CMS estimates that Medicare Advantage plan payments per enrollee will be 1% higher in 2024 than they are this year.”

“The proposed payment changes for 2024, taken together, are unlikely to have a meaningful impact on the trajectory of Medicare Advantage spending, which CBO estimates will exceed $7 trillion (cumulative) through the decade that ends in 2032,” KFF explained.

Nevertheless, industry groups and insurance giants have reacted with outrage to the Biden administration’s proposals, focusing their ire specifically on plans to tweak the risk adjustment model that dictates how much the federal government pays Medicare Advantage plans to cover beneficiaries.

“Since the proposal was tucked deep in a routine document and published with little fanfare in early February, Medicare officials have been inundated with more than 15,000 comment letters for and against the policies, and roughly two-thirds included identical phrases from form letters,” the Times reported Wednesday. “Insurers used television commercials and other strategies to urge Medicare Advantage customers to contact their lawmakers. The effort generated about 142,000 calls or letters to protest the changes.”

The Medicare Advantage industry and its Republican allies in Congress insist the Biden administration’s proposed changes would result in higher premiums for the program’s tens of millions of beneficiaries and potentially impact the quality of care—but experts, advocates, and progressive lawmakers are pushing back.

During a Senate Finance Committee hearing on Wednesday, Sen. Elizabeth Warren (D-Mass.) defended the administration’s proposals against Medicare Advantage industry “scare tactics” and argued that “these companies have built entire businesses around making beneficiaries look as sick as possible.”

“The more diagnosis codes that a beneficiary has, the higher the payment, and whatever insurers don’t spend on care they actually get to keep,” Warren said. “Unsurprisingly, government watchdogs have discovered widespread abuse.”

Kaiser Health News reported late last year that government audits have uncovered “widespread overcharges and other errors in payments to Medicare Advantage health plans, with some plans overbilling the government more than $1,000 per patient a year on average.”

One Cigna executive, according to a lawsuit against the insurance giant, privately described certain diagnoses as “golden nuggets,” an apparent reference to larger government payments for patients who are presented as sicker.

A KFF analysis published last month found that “Medicare Advantage plans have far higher per person gross margins—more than double those seen in other markets in 2021.”

Advocacy organizations—including groups representing physicians, nurses, and seniors—have attempted to counter the torrent of industry-backed criticism of the Biden administration’s proposals via the public comment process.

“The proposed reforms resulting in a limit of 1% increase is still an increase, which we understand is being opposed by the [Medicare Advantage] industry and their associations, and being mischaracterized as a cut. It is a cut only as far as it doesn’t replicate the huge 8% increase granted last year,” said California State Retirees.

Physicians for a National Health Program (PNHP), an advocacy group that supports single-payer healthcare, said earlier this month that “accountability to both Medicare beneficiaries and taxpayers instead of to investors and corporate greed is long overdue.”

“We encourage CMS not to give in to industry lobbying pressure, and to implement the proposed changes without compromising, and we believe even stronger measures are needed. After all, it is the mission of CMS to protect the integrity of the Medicare program,” PNHP added. “The profitability of MA plans has rested heavily on gaming strategies and fraud.”

Republished with permission from Common Dreams, by

<a href="https://commondreams.org" target="_blank">Common Dreams</a>

Common Dreams

Common Dreams has been providing breaking news & views for the progressive community since 1997. They are independent, non-profit, advertising-free and 100% reader supported.

Help Support Factkeepers!

Follow Us

Popular Articles

Subscribe for Updates!

Subscribe for Updates!

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!

Share This