Get AI Briefings, Transcripts & Alerts on Local & National Government Meetings — Forever.
House hearing spotlights alleged Medicare Advantage overpayments and proposed fixes
Loading...
Summary
A joint House hearing examined payments to Medicare Advantage plans, citing MedPAC estimates that MA payments exceed traditional Medicare by roughly 20% and lawmakers urged payment-system reforms and new oversight tools.
A joint hearing of the House Ways and Means health and oversight subcommittees opened with members from both parties pressing for changes to how Medicare Advantage is paid, supervised and audited.
Rep. Lloyd Doggett, ranking member on the health subcommittee, told the panel the hearing presented “an opportunity to start paving a new bipartisan path toward fiscal responsibility,” and singled out what he described as “waste, fraud and abuse” in the program. Doggett cited nonpartisan estimates that Medicare Advantage (MA) payments exceed the cost of traditional Medicare by about 20% and said that disparity costs taxpayers tens of billions of dollars each year.
Why it matters: Members from urban and rural districts said overpayments to MA plans drive higher Part B premiums and reduce funding available for other Medicare services. Several witnesses pressed for specific technical corrections to the MA payment formula — including changes to risk adjustment and to how CMS accounts for more intensive diagnosis coding by MA plans.
Brookings Institution senior fellow Matthew Fiedler, a health economist who testified to the committee, summarized the program-level concern: “Covering a Medicare beneficiary under Medicare Advantage costs an estimated 20% more than covering the same person under traditional Medicare.” Fiedler said that discrepancy likely reflects a combination of coding intensity and favorable selection and recommended aligning MA payments more closely with the cost of comparable beneficiaries in traditional Medicare.
Lawmakers and witnesses described several possible reforms that surfaced during testimony: strengthening the coding-intensity adjustment CMS uses, adopting market- or insurer-specific adjustments, and revising benchmark formulas that determine plan payments. Fiedler said those changes could free federal dollars for either richer Medicare benefits or deficit reduction without reducing access to care for beneficiaries.
Legislation mentioned: Rep. Doggett said he and colleagues had introduced the bipartisan Prompt and Fair Pay Act to require MA plans to pay at least what traditional Medicare would have paid for covered services and to establish prompt-payment rules; he also described a Guard Veterans Healthcare Act to allow VA to bill MA plans when veterans receive care from the VA rather than have MA plans retain capitated payments. Both measures were discussed as proposals the committee should consider; no formal committee votes or markups were recorded at the hearing.
What witnesses recommended: Several witnesses urged CMS to adopt clearer, more enforceable adjustments to the risk-adjustment system and to improve the transparency of payments and plan coding practices. Fiedler and others said better specification of CMS’s coding-intensity methodology (and stronger enforcement) would reduce incentives for plans to generate higher risk scores through extra documentation rather than additional patient care.
Bottom line: Members from both parties framed MA reform as a way to preserve program benefits for seniors while protecting taxpayers. The hearing surfaced consensus on the need for stronger oversight and technical fixes to the payment system, but it produced no committee action during the session.
