Artwork by medicareresources.org
Over the years, we’ve have talked a lot about the disadvantages of Medicare Advantage (MA). These plans — which have become a gold mine for profit-oriented insurers and their Wall Street backers — cover over half of Medicare beneficiaries, and are sold as a cheaper alternative to traditional Medicare. New reporting confirms that these private plans are bleeding taxpayers for billions of dollars more than traditional Medicare would cost for comparable enrollees.
Fresh reporting by MedPage — drawing from data provided by the Medicare Payment Advisory Commission (MedPAC) — highlights MA’s broken promises.
Despite reforms like the V28 risk adjustment model, MA payments still will exceed traditional Medicare by 14% per enrollee this year. Of the projected $76 billion overage, $22 billion stems directly from “upcoding” – where insurers exaggerate patients’ diagnoses in order to reap higher payments from the government.
Medicare Advantage insurers have been cited for exaggerating patients’ diagnoses & denying care
Our policy team sounded the alarm on these abuses in a March 2024 comment letter, in which NCPSSM President Max Richtman called out insurers’ nefarious practices. The letter demanded better oversight by the Center for Medicare and Medicaid Services (now led by Trump-appointee Dr. Mehmet Oz). Richtman urged the agency to take action to protect Medicare’s integrity, such as tougher coding standards and a ban on ‘abusive health risk assessments.’
“Systematic upcoding reduces the accuracy of MA payments by making the enrollee population appear sicker and costlier.” – Max Richtman, President and CEO, NCPSSM
The upcoding has become so egregious that even some Republicans have started to scrutinize major insurers. Last year, staffers for Iowa Republican Senator Chuck Grassley (who appears in our new Social Security documentary) were granted access to over 50,000 pages of United Health Care (UHC) documents. Their findings — which were released earlier this month — exposed UHC’s commitment to what Senator Grassley called “gaming the system and abusing the risk adjustment process to turn a steep profit.”
While United Health Care has emerged as the worst offender, it’s abundantly clear that many MA insurers are engaged in these shady practices. Look no further than insurers’ reliance on prior authorizations for procedures and treatments that normally would be automatically covered in traditional Medicare. This includes denying skilled nursing care that jeopardizes older patients who have nowhere else to turn.
Sen. Chuck Grassley (R-IA) accused Medicare Advantage insurers of “gaming the system.”
Patients can appeal non-coverage rulings from the prior authorization process. Appeals are triggered when patients receive Notices of Medicare Non-Coverage (NOMNC), effectively denying them care. It was reported that one patient received 12 non-coverage notices — even after winning previous appeals.
Last week, Acentra Health exposed how the prior authorization process specifically targets seniors receiving skilled nursing care. After combing through 25,000 appeals, Acentra found that 83% of coverage denials involved skilled nursing care patients. Of those, a staggering 93% related to Medicare Advantage patients, despite that group representing roughly half of the Medicare market. While it’s long overdue that the federal government crack down on these abuses by MA insurers, it’s also important to remember that seniors can avoid denials of care (and other MA-related headaches) by enrolling in traditional Medicare instead.
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Read our comment letter from 2024 here
Read more about the disadvantages of Medicare Advantage here
Listen to our podcast here.