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