Dive Brief:
- A bipartisan group of senators is urging the CMS to work with Congress to crack down on overpayments in Medicare Advantage.
- In a letter sent to the agency Monday, the lawmakers praised the CMS’ proposal to exclude diagnoses submitted through chart reviews that aren’t linked to actual medical care from risk adjustment — potentially curbing insurers’ ability to inflate their members’ illnesses to reap higher reimbursement from the government.
- But the senators argued more can be done. Congress could direct the HHS to exclude all diagnoses gleaned from chart reviews and health risk assessments, or screenings that could also be used to exaggerate members’ health conditions, they wrote.
Dive Insight:
MA, where the federal government contracts with private insurers to manage the care of Medicare seniors, has grown to cover more than half of eligible beneficiaries, according to the Medicare Payment Advisory Commission, which advises Congress on Medicare.
In MA, the government pays insurers a flat fee per month adjusted for the sickness of their members. That structure can incentivize upcoding, where payers inflate the illness of their beneficiaries to receive higher reimbursement, experts say.
The federal government will pay about $76 billion more to cover MA beneficiaries this year than it would if they were enrolled in traditional, fee-for-service Medicare, due to upcoding and favorable selection of healthier enrollees, according to MedPAC.
Overpayments in MA have become a growing concern for lawmakers and regulators. In February, the CMS said it plans to move ahead with accelerated audits of MA plans, even after a federal judge vacated a rule that could have allowed the agency to recoup billions of dollars in overpayments from payers.
Now, a bipartisan group of senators — Jeff Merkley, D-Ore., Bill Cassidy, R-La., Tina Smith, D-Minn., and Roger Marshall, R-Kan. — is urging the CMS to work with Congress to tackle MA overpayments.
The lawmakers said they support the CMS’ proposal to exclude diagnoses from chart reviews that weren’t linked to specific patient encounters when calculating risk adjustment. That change was a key provision in the No Unreasonable Payments, Coding, or Diagnoses for the Elderly, or No UPCODE, Act, introduced last year by Cassidy and Merkley.
Senators considered including some portions of the No UPCODE legislation in the “Big Beautiful Bill” passed last year, but it ultimately failed to gain ground with Republican lawmakers worried about targeting Medicare.
But the CMS’ proposed rule, which could be finalized in the coming days, could signal renewed interest in the legislation, according to Georgetown University’s Medicare Policy Initiative.
Diagnoses in unlinked chart reviews are only part of the problem, the senators wrote to CMS Administrator Dr. Mehmet Oz. For example, the No UPCODE Act also proposes to exclude diagnoses from chart reviews that were linked to medical care.
“Insurers may seek to recapture lost diagnoses by linking chart reviews to specific encounters, potentially dampening the effect of the proposed change to exclude diagnoses from unlinked chart reviews,” they wrote.
Additionally, the senators touted other potential reforms included in the bill, like changing risk adjustment methodology to use two years of diagnostic data rather than one. That could help collect health concerns that aren’t consistently reported each year, like chronic conditions, the lawmakers said.
Congress should also order the HHS to adjust payments based on coding pattern differences between MA and traditional Medicare, given the heightened coding intensity in the privatized program, they wrote.
