Proposal from CMS to Reduce Medicare Advantage Payments Sparks Legislative Interest
Senators are supporting a recent proposal by the Centers for Medicare & Medicaid Services (CMS) aimed at reducing payments in Medicare Advantage (MA) and are advocating for collaboration with Congress to take further action. The MA program allows the federal government to contract with private insurers to manage Medicare beneficiaries' care, currently covering over half of eligible seniors, according to the Medicare Payment Advisory Commission (MedPAC).
MA's payment model involves a monthly fee to insurers, adjusted based on the health of their members. This method has sparked concerns about upcoding, where insurers could exaggerate beneficiaries' health conditions to receive higher payments. MedPAC reports due to such practices and the preferential selection of healthier enrollees, the federal expenditures for MA beneficiaries are projected to be $76 billion more this year than traditional Medicare.
With growing scrutiny from lawmakers and regulators over MA overpayments, CMS unveiled plans in February to intensify audits of MA plans. This comes despite a federal judicial decision annulling a rule that could have reclaimed significant overpayments. A bipartisan group of senators, including Jeff Merkley, Bill Cassidy, Tina Smith, and Roger Marshall, urges CMS to engage Congress in tackling these overpayments.
The senators support CMS's proposal to exclude diagnoses from chart reviews not linked to specific patient interactions when evaluating risk adjustment. This aligns with the No Unreasonable Payments, Coding, or Diagnoses for the Elderly Act (No UPCODE Act), introduced by Senators Cassidy and Merkley. Though the No UPCODE provisions were once considered for inclusion in a major bill last year, momentum slowed amid broader GOP concerns over Medicare reforms.
CMS's upcoming rule may signal renewed legislative interest, as indicated by Georgetown University's Medicare Policy Initiative. However, unlinked chart reviews are only part of a larger issue. The No UPCODE Act recommends excluding diagnoses from chart reviews associated with medical visits, as insurers could counterbalance lost diagnoses by linking these reviews, thus potentially diminishing the proposed change's impact.
The senators also highlight other No UPCODE reforms, such as modifying risk adjustment to incorporate two years of diagnostic data, which could improve the tracking of under-documented conditions, including chronic diseases. They suggest Congress instruct the Department of Health and Human Services to adjust payments to reflect coding differences between MA and traditional Medicare, addressing the increased coding intensity observed in the MA program.
To enhance audits of MA plans, CMS plans to bolster its technological capabilities and expand its medical coding workforce. Meanwhile, Senator Chuck Grassley noted that Congress might revisit pharmacy benefit manager (PBM) practices following legislative developments.