Health care leaders praise Medicare Advantage payment changes in letter to CMS

Nearly 20 leaders from various sectors of the health care industry sent a letter to the U.S. Department of Health and Human Services in support of Medicare Advantage payment policy changes proposed by the Centers for Medicare & Medicaid Services.

“The continuing excess payment to Medicare Advantage plans through the coding game drains resources from taxpayers, patients and important investments in improving the community conditions that generate health,” said Dr. Don Berwick, a former CMS administrator who signed the letter. ”CMS’s proposed changes offer an opportunity for health plans to come to the table, help fix the broken payment system and redirect efforts toward the needs of patients and population health.”

The signers of the letter back proposed changes in the Calendar Year 2024 Advance Notice with Proposed Payment Updates for the Medicare Advantage and Part D Prescription Drug Programs.

Related: CMS’ new Medicare Advantage audit rule, expected to recoup $4.7B in overpayments

“These improvements are long overdue and badly needed to assure appropriate financial payments and stewardship for Medicare Advantage funds, fair payments to enable excellent care for sicker patients, sustainability of the overall Medicare program and security for all beneficiaries,” the letter said.

Medicare Advantage has grown to nearly half of the entire Medicare program. Instead of reducing costs as originally hoped, it has increased costs for taxpayers and Medicare beneficiaries, the letter said. MedPAC has estimated that in 2023 there will be $27 billion in excessive and unwarranted payments to Medicare Advantage plans, and others have projected that these overpayments will cost taxpayers $600 billion over the next eight years.

CMS overpayments are the result of hierarchical condition category coding used by plans to upcode or increase the number of diagnoses, the letter said. CMS proposes to decrease coding revenue opportunities by eliminating some categories that have been abused and standardizing the prices associated with categories of codes to avoid upcoding for some conditions.

“These increases and ongoing subsidies leave ample funding in the system for plans and providers to continue to provide benefits and appropriate care for Medicare Advantage beneficiaries,” said Dr. Richard Gilfillan, a former deputy CMS administrator who also signed the letter. “The CMS approach actually redistributes spending away from high coding plans with excessive profits toward community-based plans that serve lower-income populations.”