Medicare Advantage 'Shortfalls' Need Attention, Senators Say

Medicare Advantage: The government 'still doesn’t know how much these plans are paying for patient services and how much patients are being forced to pay out-of-pocket,' Sen. Cortez Mastro says.

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A bipartisan group of U.S. senators are calling for Medicare Advantage (MA) plan providers to improve transparency by reporting how much they are actually paying for patient services and how much patients are paying.

The group — Sens. Elizabeth Warren (D-MA), Catherine Cortez Masto (D-NV), Bill Cassidy (R-LA) and Marsha Blackburn (R-TN) — sent a letter on December 7 to the Center for Medicare and Medicaid Services regarding "shortfalls" in the agency's data collection and reporting practices for MA plans. The letter comes on the heels of a new bill the group introduced last month that seeks to help shore up those shortfalls.

In their letter, the group said there are “concerning trends" in MA including prior authorization and payment denials that actually met Medicare coverage rules.

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"Seniors in (Medicare Advantage) who use more services are more likely to disenroll from MA than healthier seniors," they said. Researchers have found that there are billions of dollars in overpayments to MA plans, "largely driven by favorable selection and shortcomings in the current risk adjustment model," they added.

The senators urged CMS to collect and publish a range of data including prior authorization requests, denials and appeals by type of service as well as justification of prior authorization denials. They also urged CMS to publicly issue data that it is already collecting, including out-of-pocket costs and provider payment information and plan comparison information.

The letter was sent on the same day that the Medicare open enrollment period ended.

New bill pushes for more details 

Under their bill, the Encounter Data Enhancement Act introduced in November, the group is seeking to require MA plan providers to supply the government with details including the amount of cost sharing — such as deductibles, copayments and coinsurance — that is imposed for an item or service. Other requirements include details on the payment type from the plan to the provider — such as value-based, fee-for-service or capitation.

“American taxpayers are paying hundreds of billions of dollars for seniors to use Medicare Advantage plans, but the federal government still doesn’t know how much these plans are paying for patient services and how much patients are being forced to pay out-of-pocket,” said Cortez Masto (D-NV) in introducing the legislation.

“My bipartisan legislation will ensure these plans are transparent, helping us conduct appropriate oversight and provide seniors with the best possible health care coverage,” she added.

Medicare spending

In 2023, some $454 billion of federal Medicare spending went to MA, but the records kept by the private insurance companies often lack key information that is needed to combat fraud and abuse, the senators said. These companies are contracted with the federal government to provide coverage for over 30 million Americans, they said.

"While the federal government already requires Medicare Advantage plans to report encounter data on services provided to beneficiaries, these records are often  incomplete or lack key information that is essential to combat fraud and abuse," they added.

The Senators said their legislation would:

  • Provide researchers and policymakers with a much clearer understanding of plan payments to providers as well as how much patients are required to pay for services.
  • Help lawmakers conduct oversight of federal dollars going to Medicare Advantage plans.
  • Assess quality of care, and strengthen health care access for America’s seniors.

What to do if you missed open enrollment

If you missed Medicare open enrollment, there may be limited opportunities for original Medicare beneficiaries to make coverage changes, as Kiplinger recently reported. For those who are enrolled, note that premiums are up from 2023. It may be worth a look to see what you'll pay for Medicare next year.

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Senior News Editor

Esther D’Amico is Kiplinger’s senior news editor. A long-time antitrust and congressional affairs journalist, Esther has covered a range of beats including infrastructure, climate change and the industrial chemicals sector. She previously served as chief correspondent for a financial news service where she chronicled debates in and out of Congress, the Department of Justice, the Federal Trade Commission and the Commerce Department with a particular focus on large mergers and acquisitions. She holds a bachelor’s degree in journalism and in English.

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