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Medicare Advantage Abuses in Focus

A big day for coverage involving abuses in Medicare Advantage (MA).

First, Scan CEO Sachin Jain has a good Health Affairs Forefront blog on MA enrollment issues. Jain recounts the fact that there are behind-the-scenes compensation schemes between some large MA plans and brokers and marketing organizations that lead to steerage of enrollees into plans, often when it is not in their best interest. He notes enrollment in low-rated plans is a problem.

The Department of Justice filed a complaint against certain brokers and MA plans, alleging plans paid hundreds of millions of dollars in illegal kickbacks to brokers in exchange for enrollments into the plans’ products.

Jain proposes a change in how compensation is made for enrollment by favoring high-performing plans and perhaps making compensation is budget neutral.

Second, healthcare policy group KFF posted an issue brief regarding expected Star bonus payments in 2025. It says federal spending on MA bonus payments will total at least $12.7 billion in 2025, similar to spending in 2023, and more than four times higher than in 2015. While Star ratings have dropped, aggregate payments remain high due to enrollment increases.

Third, these bonuses help fund supplemental benefit offerings and MedPAC, the Medicare congressional policy arm, has published a report on such benefits. It finds spending on supplemental benefits has grown significantly over the past several years. MA plans will receive about $86 billion in rebates to provide supplemental benefits to enrollees. This is about 17% of total payouts in the program, or about $2,530 per person. Rebates in 2018 were $21 billion.

MedPAC notes that there is very little transparency in how these rebates are spent, especially with non-Medicare supplemental benefits. Reforms like mandatory submission of supplemental benefits via encounter data and member education have gone in force.

Expect all three of these areas to see Capitol Hill attention this and next year.

(Some articles may require a subscription.)

Additional articles: https://www.healthaffairs.org/content/forefront/changing-broker-incentives-medicare-advantage and https://www.kff.org/medicare/issue-brief/medicare-advantage-quality-bonus-payments/

#medicareadvantage #star #quality #marketing #fwa #supplementalbenefits

https://www.fiercehealthcare.com/regulatory/medpac-look-payments-ma-plans-supplemental-benefits

Public Supports Trump Drug Pricing Plan

A survey commissioned by the Pharmaceutical Reform Alliance and conducted by National Research Inc. finds that a majority of voters are in favor of lawmakers and candidates who they believe will take on Big Pharma price-gouging. Most say they support President Trump’s most-favored-nation drug pricing policy, where prices in the U.S. are set based on the lowest price in other developed nations.

#drugpricing #mfn #irp #trump

https://thehill.com/homenews/5343025-survey-voters-big-pharma-most-favored-nation

Senate Now Zeroing In On Medicare Advantage

The Senate appears to be zeroing in on Medicare Advantage (MA) overpayments for the budget reconciliation bill to achieve greater savings and perhaps reduce Medicaid cuts. MA plans and lobbies are lining up to oppose it, saying the reductions will impact enrollees. Sen. Bill Casidy, R-LA and Chairman of the HELP Committee, is one GOP senator examining it, which has bipartisan support (not that Democrats will vote for the bill).

Exactly what would be included is open. One report says the provision would save $100 billion over the 10-year horizon and would limit the ability to include old or unrelated medical conditions in the cost of care. Another proposal would save as much as $275 billion over 10 years. Very high estimates suggest total overpayments from risk adjustments are $43 billion annually (although I have great doubt about that number).

The Centers for Medicare and Medicaid Services (CMS) recently announced 100% audits of risk adjustment in MA. UnitedHealthcare and Humana recently backed partial reform related to diagnoses only tied to health risk assessments from home visits as well as from manual chart reviews. Moderates and pragmatic conservatives such as Sen. Josh Hawley, R-MO, are worried about both Medicaid and Medicare cuts.

In other news, the Health and Human Services’ Office of Inspector General (HHS OIG) announced the results of a risk adjustment audit and found that Coventry Health and Life Insurance Co., an Aetna subsidiary, received an estimated $6.9 million in Medicare Advantage overpayments. This was based on samples from 2018 and 2019. HHS OIG identified $752,587 of overpayments in its sample. Extrapolating from the sample, OIG estimated Coventry received $6.9 million in overpayments. 

As well, House conservatives have released a 10-page memo with proposals to go deeper in terms of Medicaid cuts in budget reconciliation, including restrictions on the Medicaid Federal Medical Assistance Percentage (FMAP) for expansion populations and further changes to provider taxes that generate state match dollars. These were rejected by House leaders.

Interestingly, the protests in Los Angeles over the White House’s deportation efforts could boost reconciliation efforts as tens of billions are included in the bill for border security and enforcement staff.

My view on including Medicare overpayments: far-reaching reforms of risk adjustment in the bill likely would continue the negative effects on MA benefits, coverage, and geography going into 2026. We already expect further retrenchment despite a better 2026 rate hike announcement. But it is hard to argue against carefully crafted reforms that get to ruling out abusive practices of a small number of plans that generate a huge windfall.

Additional articles: https://www.beckerspayer.com/policy-updates/insurers-oppose-medicare-advantage-changes-in-spending-bill/ and https://www.beckerspayer.com/payer/aetna-subsidiary-received-7m-in-medicare-advantage-overpayments-audit/ and https://thehill.com/homenews/house/5341366-house-conservatives-senate-gop-megabill/?tbref=hp and https://thehill.com/homenews/senate/5343114-trump-big-beautiful-bill-la-immigration-protests/ and https://www.healthaffairs.org/content/forefront/taking-stock-health-coverage-impacts-house-reconciliation-bill

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #spending #medicaid #coverage #medicareadvantage #overpayments #riskadjustment

https://thehill.com/homenews/senate/5341080-republicans-debate-fiscal-deficit-cuts/?tbref=hp

Preliminary Reports Show Major Exchange Premium Hikes

Exchange rate filings are beginning to filter in for 2026 and the news is not good. Many insurers are asking for double-digit rate increases in the individual and small group Exchange markets. This is occurring due to the likely expiration of enhanced premium tax credits and rising costs. Reports from various states say rate hikes could be as much as 23%. Average increases seem to be well into the teens.

#exchanges #aca #obamacare #coverage

https://www.beckerspayer.com/payer/payers-seek-double-digit-exchange-rate-hikes-for-2026

Say This Three Times: Healthcare Cut Consternation

Republican senators are weighing in with leadership regarding concerns with the “Big Beautiful Bill.” Moderates are concerned about spending cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP). Budget hawks are demanding more deficit and debt reduction and want the House compromise on state and local tax (SALT) deductions undone. The conservatives also want $200 billion in reductions to Medicare in the area of fraud, waste, and abuse (FWA).

There are at least two hard “No’s” on the conservative side. There are other conservatives very concerned and looking for more reductions. On the moderate and pragmatic conservative side, there are a number of senators very concerned about reductions. The House version of the bill would not be able to pass in the Senate as written based on probable numbers of negative votes on either side of the ideological divide.

At least 4 in 10 Republicans are worried about the consequences of Medicaid cuts, a new healthcare policy group KFF survey finds. Further, of the Republican respondents, the poll found that 75% are worried that sweeping changes to the program would hurt their family’s ability to get and pay for care. About 70% are concerned that the cuts would lead to an increase in the uninsured and negatively impact providers.

KFF also published an update of the breakout of the uninsured by state if the budget reconciliation bill passes. The budget bill’s healthcare cuts and the expiration of enhanced Exchange subsidies mean 15 million will lose coverage, with 16 million losing coverage by 2034 when you include Trump’s proposed Exchnage regulation changes.

In other news, the Paragon Health Institute, which has great influence in the Trump administration, is touting its analysis of incentives for people to misestimate income to qualify for larger subsidies in the Exchanges. The analysis shows the number of people claiming income between 100 percent to 150 percent of the federal poverty limit (FPL) who sign up for coverage with the likely number of people who are eligible for this coverage within that income grouping. It also discusses the incentives facing brokers and insurers for improper enrollment.

Paragon says 4 to 5 million people improperly enrolled for subsidized health coverage on the Exchanges in 2024, with a cost of upwards of $15 to $20 billion in 2025.

While I support the Exchanges and even continuing enhanced subsidies in some form, Paragon’s analysis is compelling. We should not tolerate fraud and should be able to better monitor such enrollments and misestimation.

Paragon recommends reforms, including the following. Some of the recommendations are in the budget reconciliation bill.

1. Allowing enhanced subsidies to expire after 2025.
2. Raise subsidy recapture limits to reduce incentives for people to misestimate their income.
3. Limit automatic re-enrollment into Exchange plans and end it for people moving from or into fully-taxpayer subsidized plans.
4. Appropriate cost-sharing reduction payments and prohibit silver-loading.
5. Aggressive oversight of HealthCare.gov, enhanced direct enrollment, and insurer and broker actions to take advantage of misestimating income.
6. Reverse Biden policies that enabled such widespread fraudulent enrollment, particularly the continuous open-enrollment period for people who report they have income below 150 percent FPL.

Additional articles: https://thehill.com/policy/healthcare/5336641-republicans-worried-medicaid-cuts-impact-kff-survey/ and https://www.kff.org/medicaid/poll-finding/kff-health-tracking-poll-the-publics-views-of-funding-reductions-to-medicaid/ and https://www.kff.org/affordable-care-act/issue-brief/how-will-the-2025-reconciliation-bill-affect-the-uninsured-rate-in-each-state-allocating-cbos-estimates-of-coverage-loss/ and https://paragoninstitute.org/private-health/the-great-obamacare-enrollment-fraud/

#budgetreconciliation #congress #trump #medicaid #aca #obamacare #exchanges #coverage #fwa

https://thehill.com/homenews/senate/5335866-senate-bill-medicaid-ai-snap-negotiations

Big Beautiful Bill Update

Another update on the Big Beautfiul Bill as it seeks to work its way through the Senate. A number of major developments today.

A new brief from America’s Essential Hospitals says the Medicaid reductions could mean an increase in hospital uncompensated care of $42.4 billion.

The Paragon Health Institute, a conservative think tank with major influence in the administration, is urging the Senate to make changes in the bill to go deeper in terms of cuts and reform.

It says lawmakers should make changes in the following areas:

• All state directed payments under Medicaid should be capped at Medicare rates rather than grandfathering in existing rates.
• It says the bill should go further than the limits on provider tax reform by phasing down provider taxes in only Medicaid expansion states.
• It wants limits on intergovernmental transfers, where local governments or public providers like county hospitals and university health systems send funds to the state to boost federal matching funds.

Republicans in the Senate are looking at making cuts in Medicare to offset Medicaid cuts or add to overall savings. The likely targets are Medicare Advantage (MA) plan risk adjustment upcoding as well as potentially site neutral payment reform. The Better Medicare Alliance opposes any reduction in MA. Paragon recommended Medicare reforms that could save $712 billion, including $250 billion in MA changes and another $220 billion in site-neutral reforms. Other savings could come from reforms to uncompensated care, the 340B program, and more.

In other news, Humana has recommended some changes to risk adjustment coding as well. It wants to place some restrictions on reimbursement for conditions reported during in-home visits (where health risk assessments (HRAs) are performed) and chart reviews. It says diagnoses from home-based HRAs should only be counted if reported by other providers. In addition, it says diagnoses from chart review submissions should only count if the original medical record is present unless reported by another provider. These changes are what I have been recommending too.

Additional articles: https://essentialhospitals.org/wp-content/uploads/2025/06/CBO-Analysis-Reconciliation-June-2025.pdf and https://www.fiercehealthcare.com/providers/one-big-beautiful-bill-would-raise-hospitals-uncompensated-care-costs-42b-2034 and https://insidehealthpolicy.com/daily-news/paragon-joins-push-senators-modify-house-reconciliation-bill and https://www.fiercehealthcare.com/payers/house-gop-advances-budget-megabill-imposing-stricter-medicaid-work-requirements and https://insidehealthpolicy.com/daily-news/bma-pushes-back-gop-senators-broach-ma-cuts-reconciliation-talks and https://thehill.com/homenews/senate/5334831-republican-senators-consider-medicare-changes/?tbref=hp and https://www.modernhealthcare.com/politics-policy/humana-medicare-advantage-billing-limits

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #spending #medicaid #uninsured #coverage #medicare #medicareadvantage #riskadjustment #siteneutral

https://www.modernhealthcare.com/politics-policy/medicare-cuts-trump-tax-bill

— Marc S. Ryan

Of Musk, Trump, Medicaid, Medicare, The ACA, And The Uninsured

The budget reconciliation saga continues a day after Elon Musk attacked the bill as “a disgusting abomination.” The president leapt into action, trying to convince Senate conservatives to support the package with promises of later spending cuts.

The bill hit another pothole today with a new Congressional Budget Office (CBO) score that said the bill will mean more than $1 trillion in cuts over a decade. This is higher due to the last-minute changes made in the House to obtain enough conservatives to pass the bill. The biggest hit comes in Medicaid, with a revised reduction of $864 billion. Work requirements save $344 billion after the House accelerated the provision to no later than December 21, 2026.

What’s more, the CBO projects that the Medicaid cuts and other healthcare reductions in the bill will lead to 10.9 million people becoming uninsured, including 7.8 million who would lose Medicaid benefits.

In general, the uninsured rate swells due to:

• The Medicaid policy changes, which include work requirements, limitations on state provider taxes to generate the state matching contribution, and various enrollment changes and restrictions, among other changes. Medicaid is about $864 billion over ten years in savings. About 7.8 million lose Medicaid due to the bill’s Medicaid provisions.
• Several policies impacting the Affordable Care Act (ACA) that would change premium tax credits for migrants, increased recoupment of premium subsidies paid out at levels that are too high from income, and increased eligibility checks. These ACA changes save about $230 billion over ten years. About 3.1 million lose coverage due to the bill’s ACA provisions and some other provisions.

The CBO also said that about 4.2 million will exit the Exchanges and remain uninsured due to the expiration of the enhanced premium subsidies at the end of 2025.

An additional approximate 900,000 would lose Exchange coverage as a result of a proposed Trump administration rule issued in March that would shorten the annual enrollment period, require stricter eligibility reviews, and make other changes.

This brings the total increase in the number of uninsured to 16 million by 2034.  

Moderate and pragmatic conservative GOP senators appear to be willing to support Medicaid work requirements, but are very worried about other changes, especially the provider tax limitations and constraints on state directed payments. They worry about the fallout on providers, especially rural hospitals.

State officials who run the Exchanges urged the GOP to reject the ACA policy shifts, including new enrollment verification requirements and restrictions on tax credits. They say those changes in concert with expiration of the premium subsidies will upend state-based insurance exchanges by increasing costs, adding administrative burdens to states and consumers, stripping states’ decision-making authority, and destabilizing the program. The officials say in some states more than one in three could lose coverage.

A new Robert Wood Johnson analysis also finds that healthcare providers would lose more than $770 billion in revenue over the next decade under the bill. 

Senate Republicans are now looking at whether the caucus would support fraud, waste, and abuse (FWA) in Medicare to add to reductions and possibly alleviate some of the Medicaid cuts. This is where I predicted Medicare Advantage (MA) risk adjustment reforms might be put on the table.

Additional articles: https://www.modernhealthcare.com/politics-policy/tax-bill-medicaid-cuts-cbo-gop and https://www.medpagetoday.com/publichealthpolicy/washington-watch/115901 and https://thehill.com/policy/healthcare/5332414-congressional-budget-office-estimate-health-insurance-losses-gop-megabill/ and https://insidehealthpolicy.com/daily-news/provider-taxes-state-directed-payments-sticking-points-among-gop-senators and https://insidehealthpolicy.com/daily-news/state-exchange-officials-urge-senate-leaders-reject-house-bill and https://insidehealthpolicy.com/daily-news/naic-urges-senate-leadership-change-or-delay-exchange-related-policies and https://www.fiercehealthcare.com/regulatory/state-exchange-directors-press-senators-extend-aca-tax-credits and https://www.rwjf.org/en/insights/our-research/2025/05/reconciliation-bill-and-end-of-enhanced-subsidies.html?cid=xsh_rwjf_li

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #medicaid #coverage #medicare #medicareadvantage #aca #obamacare #exchanges #providers #uninsured

https://thehill.com/homenews/senate/5333247-senate-gop-medicare-trump-tax-bill/

— Marc S. Ryan

Elon Musk Drops Bomb On Budget Reconciliation

Just as Elon Musk exited Washington, the world’s richest man dropped a bomb on Donald Trump’s Big Beautiful Bill by calling it “a disgusting abomination.”

Rightists in the Senate were already agitated by the increase in the deficit and debt as well as what they see as a lack of deep spending cuts, but Musk’s remark has egged the conservatives on. Sens. Rand Paul, R-KY, Ron Johnson, R-WI, Rep. Mike Lee, R-UT, and Rick Scott, R-FL, have all raised issues with the deficits and debt. Lee and Paul backed Musk after his comments went viral.

On the other hand, at least four moderates and pragmatists in the Senate GOP caucus have expressed concern about Medicaid cuts. Normally conservative Josh Hawley has expressed major misgivings with Medicaid cuts and he said that Trump told him Monday that the final bill would not have Medicaid cuts. That upset conservatives in the House, which fought for additional cuts for their support.

House and Senate Republicans are being hit hard in their districts over Medicaid after a concerted effort by Democrats to advertise the issue. Collins and Hawley both have been vocal in the last few days. Hawley says he is concerned about provider tax limitations and cost-sharing.

Trump is busy working senators to vote for the bill. He seems to be making headway with some, including Johnson. But it will be a tough haul.

In other news, the Peterson-KFF Health Tracker looked at early insurance filings in three states and the District of Columbia and concludes that the premium subsidy expiration alone will add 4% to premiums in 2026. Insurers blame smaller enrollment and an increase in risk for the hikes. A major advertising campaign is pushing pressure on Republicans to reconsider a sunset. Some GOP moderates would like an extension, although likely outside of the reconciliation bill.

Additional articles: https://thehill.com/homenews/5331561-elon-musk-trump-budget-bill-gop/ and https://thehill.com/homenews/senate/5331383-trump-bill-senate-gop-criticism-musk/ and https://thehill.com/homenews/senate/5330775-rand-paul-mike-lee-criticize-trump-musk/?tbref=hp and https://thehill.com/homenews/senate/5330251-hawley-trump-medicaid/?tbref=hp and https://thehill.com/homenews/campaign/5331411-medicaid-cuts-republicans-defensive/?tbref=hp and https://www.modernhealthcare.com/politics-policy/trump-senators-tax-bill-medicaid and https://www.healthsystemtracker.org/brief/early-indications-of-the-impact-of-the-enhanced-premium-tax-credit-expiration-on-2026-marketplace-premiums/

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #medicaid #coverage #aca #exchanges #obamacare

https://www.nbcnews.com/politics/congress/republicans-face-new-pressure-extend-expiring-obamacare-tax-credits-rcna209281

Major Healthcare Changes At HHS, CMS

Centers for Medicare & Medicaid Services (CMS) Deputy Administrator Stephanie Carlton, laid out the agency’s major priorities, which include:

• Major investments in technology and data sharing
• Attacking fraud
• Investments in artificial intelligence
•  Drug price reform

More details on the president’s FFY 2026 budget proposal continue to show major reductions to various agencies — an $18 billion cut to the National Institutes of Health (40%), a $3.6 billion cut to the Centers for Disease Control (CDC) (43%), and a $409 million cut to the Food and Drug Administration (FDA) (11%).

A number of new initiatives prioritized by health chief Robert F. Kennedy, Jr. are funded along with restructuring tied to the new agenda.

Additional articles: https://insidehealthpolicy.com/daily-news/advocates-blast-proposed-cuts-nih-cdc-research-programs and https://www.healthcaredive.com/news/hhs-2026-budget-nih-cuts-trump-healthcare/749510/

(Some articles may require a subscription.)

#hhs #cms #rfkjr #nih #fda #cdc

https://www.fiercehealthcare.com/regulatory/cms-deputy-stephanie-carlton-lays-out-agency-priorities-0

More Fallout From Budget Reconciliation

The saga over the House reconciliation bill and what the Senate will do continues.

Republicans in swing or moderate districts returned home to town halls with tough questions from their constituents about Medicaid and other social service cuts as well as the fact that deficits will increase under the bill.

A healthcare policy group KFF issue briefer allocates the Congressional Budget Office’s federal spending reductions and enrollment losses across the states. The CBO’s latest cost estimates say the bill would reduce federal Medicaid spending by $723 billion over the decade timeframe and that the number of uninsured would increase by 7.6 million due to those cuts.

KFF finds that the biggest reduction areas in Medicaid are:

• Mandating that adults who are eligible for Medicaid through the ACA expansion meet work and reporting requirements ($280 billion)
• Repealing the Biden Administration’s rule simplifying Medicaid eligibility and renewal processes ($167 billion)
• Establishing a moratorium on new or increased provider taxes ($89 billion)
• Revising the payment limit for state directed payments ($73 billion)
• Increasing the frequency of eligibility redeterminations for the ACA expansion group ($53 billion).

Federal cuts to states represent 11% of federal spending on Medicaid over the period. By state, the cuts range from 5% in Wyoming, Alabama, and Wisconsin to 15% in Washington, Louisiana, and Illinois. Great graphics show enrollment losses by states, but states could react differently.

A Health Affairs Forefront blog discusses the bill, especially impacts on dual eligibles and expiring enhanced premium subsidies.

A Modern Healthcare article about an Urban Institute and Robert Wood Johnson analysis says Medicaid is cut by over $700 billion and the Exchanges by over $100 billion (most of which is the expiring enhanced premium subsidies). About 4.2 million people will leave the Exchanges due to the enhanced subsidies expiring. The researchers say providers would be on the hook for $278 billion in uncompensated care for newly uninsured people.

Additional articles: https://www.kff.org/medicaid/issue-brief/allocating-cbos-estimates-of-federal-medicaid-spending-reductions-and-enrollment-loss-across-the-states/ and https://www.healthaffairs.org/content/forefront/big-republican-cost-shift-massive-cuts-medicaid-and-aca-increase-costs-older-adults-and and https://www.modernhealthcare.com/politics-policy/one-big-beautiful-bill-act-2025-obamacare-aca

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #medicaid #exchanges #spending #coverage

https://thehill.com/homenews/house/5325547-republicans-trump-big-beautiful-bill-town-halls