In our February update, we told you that according to federal audits, eight of the ten biggest Medicare Advantage insurers — representing more than two-thirds of the market — have deliberately overcharged Medicare for the services they have provided.
What is more, four of the five largest players — UnitedHealth, Humana, Elevance, and Kaiser — have faced federal lawsuits alleging that efforts to over-diagnose their customers crossed the line into fraud.
In fact, Medicare-managed care plans will take in a projected $27 billion in excess payments this year because they spend roughly 6% more to care for beneficiaries than it would cost in the traditional, fee-for-service program, according to a newly released congressional report.
Obviously, this is very troubling in light of the looming financial crisis facing Medicare in the relatively near future.
But the insurance industry and Republicans have been using the debt ceiling fight and President Biden’s vows not to cut Medicare to oppose changes to private Medicare Advantage plans, which would help improve Medicare’s financial outlook.
The insurance companies have launched a multi-million dollar ad campaign and lobbying effort to oppose the rate change. You may have seen them on TV.
The Better Medicare Alliance—backed by insurers such as Aetna Inc., Humana Inc., and UnitedHealth Group Inc.—has spent $12.5 million since late December on an ad campaign warning of “cuts” to Medicare Advantage, and urging people to call the White House in opposition.
Lawmakers have joined the action too: Vern Buchanan (R-Fla.), a member of the House Ways and Means Committee, led a letter from 13 Republicans calling for HHS to reverse course on the rate change.
Jason Smith (R-Mo.), chairman of the House Ways and Means Committee, said he sees the rate notice as a cut for insurers and warned it could result in slashed benefits for those on Medicare Advantage plans.
Health and Human Services (HHS) Secretary Xavier Becerra pushed back on the claim, saying insurers would get an increase in payments and any benefit changes would be “those insurance companies doing it.”
“There is nothing that we’re doing that would require any insurance company to cut any benefits,” he said.
Bacerra has told lawmakers some insurers in Medicare Advantage are “gaming the system” and the government is spending too much on managed care.
“It’s hard to believe the amount of money being spent lobbying and doing commercials trying to prevent us” from overseeing the program, Becerra said recently at a hearing of the House Appropriations subcommittee that oversees HHS funding and vowed the government would continue its oversight.
Last week the Biden Administration announced that the Centers for Medicare & Medicaid Services will increase payments to Medicare Advantage plans, on average, by $13.8 billion, or 3.32% from 2023 to 2024. The original rate notice proposal, set to begin Jan. 1, 2024, was expected to increase plan payments by an average of roughly 1%, or $4 billion.
“This year’s update strengthens Medicare for our seniors and Americans with disabilities,” said a statement from Health and Human Services Secretary Xavier Becerra. “We are committed to ensuring private companies are holding up their end of the deal to provide quality care to beneficiaries and that payments to these companies.