As discussed in a recent CMA Alert (Feb. 22, 2024), the Centers for Medicare & Medicaid Services (CMS) has issued proposed Medicare Advantage (MA) and Part D payment rates for 2025, comments to which are due March 1, 2024. MA plans are significantly overpaid, due in part to manipulation of the risk adjusted payment system currently in place. While taking some steps to rein in overpayments to MA plans, CMS proposes to give plans an overall pay increase of 3.7% (or $16 billion) next year.
Efforts at recouping improper payment to MA plans are underway at other federal agencies, including the Department of Justice (DOJ). As noted in an article in Fierce Healthcare titled “Medicare Advantage fraud in DOJ’s crosshairs after agency reports $2.7B in settlements” by Noah Tong (Feb 23, 2024), the DOJ recently issued a press release (Feb. 22, 2024) announcing $2.68 billion in settlements and judgments under the False Claims Act in the previous fiscal year. Of the $2.68 billion, according to the press release, “over $1.8 billion related to matters that involved the health care industry, including managed care providers, hospitals, pharmacies, laboratories, long-term acute care facilities, and physicians.” The release singled out “Medicare Advantage Matters” and stated:
The Justice Department continued to pursue cases alleging false claims in the Medicare Advantage (or Medicare Part C) program, including allegations that organizations participating in the program knowingly submitted or caused the submission of inaccurate information or knowingly failed to correct inaccurate information about the health status of beneficiaries enrolled in their plans to increase reimbursement. As Medicare Part C is now the largest component of Medicare, both in terms of federal dollars spent and the number of beneficiaries, the work of the Justice Department in this area is of critical importance.
The press release highlights settlements that DOJ reached with Cigna and Martin’s Point, and references ongoing litigation action against several MA plans, including UnitedHealth Group, Independent Health Corporation, Elevance Health and Kaiser Permanente.
The Fierce Healthcare article also references the Office of Inspector General’s (OIG) Strategic Plan titled “Oversight of Managed Care for Medicare and Medicaid” (Aug. 2023). Quoting health law expert Bill Sarraille, the article states:
When you look at this release in combination with the OIG’s recent update of its strategic managed care oversight plan and OIG’s forthcoming MA guidance release, the writing is on the wall—the government is coming after MA plans and risk adjustment […]
Separate actions by DOJ concerning UnitedHealth, the largest MA insurer, is referenced in a recent article in Becker’s Payer Issues titled “Justice Department begins antitrust investigation into UnitedHealth” by Madeline Ashley (Feb. 27, 2024). The article notes that DOJ investigators “have been interviewing healthcare industry representatives in UnitedHealth competition sectors in recent weeks” and notes that “[t]he inquiry is, in part, looking into Optum’s physician group acquisitions and how the physician and health plan unit ownerships affect competition.”
In Other MA News …
The Commonwealth Fund recently published findings from its 2024 Value of Medicare Survey titled “What Do Medicare Beneficiaries Value About Their Coverage?” (Feb. 22, 2024). The Fund’s data brief presents findings that “compare the experiences of beneficiaries with traditional Medicare to those with Medicare Advantage.” The findings include:
- “Larger shares of beneficiaries in MA plans than in traditional Medicare reported they experienced delays in getting care because of the need to obtain prior approval (22% vs. 13%) and couldn’t afford care because of copayments or deductibles (12% vs. 7%). […]”
- “Seven in 10 beneficiaries in MA said they used some of their plan’s supplemental benefits in the past year; three in 10 did not use any. Four in 10 reported using their dental or vision benefits or an allowance for over-the-counter medications.”
Among other things, the report noted:
Beneficiaries in both traditional Medicare and Medicare Advantage (MA) reported challenges in accessing care in the past two years. But more beneficiaries in MA plans said they experienced delays in getting care because of the need to obtain plan approval to get a test or procedure. A larger share of those in MA plans also said they could not afford care because of copayments or deductibles. The survey did not assess differences in health care needs by type of coverage [emphasis added].
In addition, STAT News recently published a “First Opinion” article titled “Medicare Advantage is bad for patients and bad for investors” by Wendell Potter and Philip Verhoef (Feb. 28, 2024). The article talks about falling stock prices for MA insurance companies due to reports of higher- than-average health care utilization by MA enrollees and goes on to discuss MA overpayments and access to care issues. Among other things, the authors note:
The truth is that MA has been a broken system since the beginning, especially for patients. The business worked only as long as insurers were able to extract inappropriately large payments from the Medicare fund through methods like upcoding, where plans list false or exaggerated diagnoses on patient charts to get more money while providing no additional care. In fact, the MA model relies on providing as little care as possible in general, with insurers putting care approval behind a wall of delays and denials to save money and leaving patients suffering without necessary treatment. Now that the government is trying to rein in these abuses and seniors are using more health care than before, this model is in serious jeopardy.
While stating that traditional Medicare needs its own improvements, the authors highlight the administrative efficiency of the traditional Medicare program, and conclude:
Medicare Advantage isn’t working for any group: the government, patients, taxpayers, and now even investors. It’s time to turn to what we already know works. We need to support and strengthen traditional Medicare.
February 29, 2024 – D. Lipschutz