[There is “little evidence” that higher payments to Medicare
Advantage are justified because their enrollees are sicker than the
average senior.] [[link removed]]

MEDICARE ADVANTAGE PLANS COSTING BILLIONS MORE THAN THEY SHOULD  
[[link removed]]


 

Fred Schulte
November 11, 2021
Kaiser Health News
[[link removed]]


*
[[link removed]]
*
[[link removed]]
*
* [[link removed]]

_ There is “little evidence” that higher payments to Medicare
Advantage are justified because their enrollees are sicker than the
average senior. _

, Creative Commons Attribution-Share Alike 2.0

 

Switching seniors to Medicare Advantage plans has cost taxpayers tens
of billions of dollars more than keeping them in original Medicare, a
cost that has exploded since 2018 and is likely to rise even higher,
new research has found.

Richard Kronick, a former federal health policy researcher and a
professor at the University of California-San Diego, said his analysis
of newly released Medicare Advantage billing data estimates that
Medicare overpaid the private health plans by more than $106 billion
from 2010 through 2019 because of the way the private plans charge for
sicker patients.

Nearly $34 billion of that new spending came during 2018 and 2019, the
latest payment period available, according to Kronick. The Centers for
Medicare & Medicaid Services made the 2019 billing data public
[[link removed]] for
the first time in late September.

“They are paying [Medicare Advantage plans] way more than they
should,” said Kronick, who served as deputy assistant secretary for
health policy in the Department of Health and Human Services during
the Obama administration.

Medicare Advantage, a fast-growing alternative to original Medicare,
is run primarily by major insurance companies. The health plans
have enrolled
[[link removed]] nearly
27 million members, or about 45% of people eligible for Medicare,
according to AHIP, an industry trade group formerly known as
America’s Health Insurance Plans.

The industry argues that the plans generally offer extra benefits,
such as eyeglasses and dental care, not available under original
Medicare and that most seniors who join the health plans are happy
they did so.

“Seniors and taxpayers alike have come to expect high-quality,
high-value health coverage from MA [Medicare Advantage] plans,” said
AHIP spokesperson David Allen.

Yet critics have argued for years that Medicare Advantage costs
taxpayers too much. The industry also has been the target of multiple
government investigations
[[link removed]] and Department of
Justice lawsuits
[[link removed]] that
allege widespread billing abuse by some plans.

The payment issue has been getting a closer look as some Democrats in
Congress search for ways to finance the Biden administration’s
social spending agenda. Medicare Advantage plans also are scrambling
to attract new members by advertising widely during the fall
open-enrollment period, which ends next month.

“It’s hard to miss the big red flag that Medicare is grossly
overpaying these plans when you see that beneficiaries have more than
30 plans available in their area and are being bombarded daily by TV,
magazine and billboard ads,” said Cristina Boccuti, director of
health policy at West Health, a group that seeks to cut health care
costs and has supported Kronick’s research.

Kronick called the growth in Medicare Advantage costs a “systemic
problem across the industry,” which CMS has failed to rein in. He
said some plans saw “eye-popping” revenue gains, while others had
more modest increases. Giant insurer UnitedHealthcare, which in 2019
had about 6 million Medicare Advantage members, received excess
payments of some $6 billion, according to Kronick. The company had no
comment.

“This is not small change,” said Joshua Gordon
[[link removed]], director of
health policy for the Committee for a Responsible Federal Budget, a
nonpartisan group. “The problem is just getting worse and worse.”

Responding to written questions, a CMS spokesperson said the agency
“is committed to ensuring that payments to Medicare Advantage plans
are appropriate. It is CMS’s responsibility to make sure that
Medicare Advantage plans are living up to their role, and the agency
will certainly hold the plans to the standards that they should
meet.”

Making any cuts to Medicare Advantage payments faces stiff opposition,
however.

On Oct. 15, 13 U.S. senators, including Sen. Kyrsten Sinema (D-Ariz.)
sent a letter
[[link removed]] to
CMS opposing any payment reductions, which they said “could lead to
higher costs and premiums, reduce vital benefits, and undermine
advances made to improve health outcomes and health equity” for
people enrolled in the plans.

Much of the debate centers on the complex method used to pay the
health plans.

In original Medicare, medical providers bill for each service they
provide. By contrast, Medicare Advantage plans are paid using a coding
formula called a “risk score” that pays higher rates for sicker
patients and less for those in good health.

That means the more serious medical conditions the plans diagnose the
more money they get — sometimes thousands of dollars more per
patient over the course of a year with little monitoring by CMS to
make sure the higher fees are justified.

Congress recognized the problem in 2005 and directed CMS to set an
annual “coding intensity adjustment” to reduce Medicare Advantage
risk scores and keep them more in line with original Medicare.

But since 2018, CMS has set the coding adjustment at 5.9%, the minimum
amount required by law. Boccuti said that adjustment is “too low,”
adding that health plans “are inventing new ways to increase their
enrollees’ risk scores, which gain them higher monthly payments from
Medicare.”

Some of these coding strategies have been the target of whistleblower
lawsuits and government investigations that allege health plans
illegally manipulated risk scores by making patients appear sicker
than they were, or by billing for medical conditions patients did not
have. In one recent case, the Justice Department accused
[[link removed]] Kaiser
Permanente health plans of obtaining about $1 billion by inflating
risk scores. In a statement
[[link removed]],
the insurer disputed the allegations. (KHN is not affiliated with
Kaiser Permanente.)

Legal or not, the rise in Medicare Advantage coding means taxpayers
pay much more for similar patients who join the health plans than for
those in original Medicare, according to Kronick. He said there is
“little evidence” that higher payments to Medicare Advantage are
justified because their enrollees are sicker than the average senior.

Kronick, who has studied
[[link removed]] the
coding issue for years, both inside government and out, said that risk
scores in 2019 were 19% higher across Medicare Advantage plans than in
original Medicare. The Medicare Advantage scores rose by 4 percentage
points between 2017 and 2019, faster than the average in past years,
he said.

Kronick said that if CMS keeps the current coding adjustment in place,
spending on Medicare Advantage will increase by $600 billion from 2023
through 2031. While some of that money would provide patients with
extra health benefits, Kronick estimates that as much as two-thirds of
it could be going toward profits for insurance companies.

AHIP, the industry trade group, did not respond to questions about the
coding controversy. But a report prepared for AHIP warned
[[link removed]] in
September that payments tied to risk scores are a “key component”
in how health plans calculate benefits they provide and that even a
slight increase in the coding adjustment would prompt plans to cut
benefits or charge patients more.

That threat sounds alarms for many lawmakers, according to Kronick.
“Under pressure from Congress, CMS is not doing the job it should
do,” he said. “If they do what the law tells them to do, they will
get yelled at loudly, and not too many people will applaud.”

_FRED SCHULTE, John A. Hartford Senior Correspondent on the enterprise
team, has worked at the Baltimore Sun, the South Florida Sun Sentinel
and the Center for Public Integrity. He is a four-time Pulitzer Prize
finalist for stories including those that exposed excessive heart
surgery death rates in veterans’ hospitals, substandard care by
health insurance plans treating low-income people and the hidden
dangers of cosmetic surgery in medical offices. Schulte has received
the George Polk Award, two Investigative Reporters and Editors awards,
three Gerald Loeb Awards for business writing and two Philip Meyer
Awards. The University of Virginia graduate is the author of
“Fleeced!”_

[email protected]
@fredschulte [[link removed]]_

_KAISER HEALTH NEWS publishes a variety of newsletters and other email
alerts to keep you updated on everything important happening in
national and state health policy discourse. Our daily First Edition
and Morning Briefing emails give you a look at all the important news
of the day, while our topic emails round up KHN’s coverage on such
issues as Medicare, Medicaid, Aging and Insurance. Sign-up. 
[[link removed]]_

*
[[link removed]]
*
[[link removed]]
*
* [[link removed]]

 

 

 

INTERPRET THE WORLD AND CHANGE IT

 

 

Submit via web [[link removed]]
Submit via email
Frequently asked questions [[link removed]]
Manage subscription [[link removed]]
Visit xxxxxx.org [[link removed]]

Twitter [[link removed]]

Facebook [[link removed]]

 




[link removed]

To unsubscribe, click the following link:
[link removed]