Becerra charges insurer claims of Medicare Advantage pay cuts 'categorically false'

Department of Health and Human Services (HHS) Secretary Xavier Becerra forcefully pushed back against the contention that a proposed payment rule will wind up cutting Medicare Advantage (MA) plan payments, the latest in an escalating feud with insurers.

“Any claim that this administration is cutting Medicare is categorically false,” Becerra said in a statement Friday. “Leave it to deep-pocketed insurance companies and industry front groups to characterize this year’s increase in Medicare Advantage payments as a cut.”

The statement is the most forceful pushback by the Biden administration surrounding the proposed advance notice issued earlier this month laying out payment policies for MA and Part D plans for 2024. MA has become a popular and lucrative market for insurers, with enrollment topping 30 million this year

The Centers for Medicare & Medicaid Services (CMS) proposed a 1% payment increase to MA plans for next year. However, several insurers and groups such as AHIP and the Better Medicare Alliance (BMA) have charged the rule will actually result in a 2.27% cut to plans when taking into account changes to star ratings, risk adjustment and other factors. 

Becerra said that any talk, though, of a cut to plans is “disinformation being pushed out by high-paid industry hacks and their allies.”

He added that the administration recently finalized a new MA audit rule that aims to overhaul risk adjustment data validation audits to get any overpayments. 

“If our audits find overpayments, we will recover those taxpayer dollars from insurance companies and put them where they belong—back in Medicare,” Becerra said. 

HHS released a fact sheet that noted MA plans also got an 8.5% hike in payments from 2022 to 2023. 

The BMA put out an independent analysis earlier this week that challenged CMS’ statements on the 1% pay hike. The analysis conducted by Avalere Health argues that a lower effective growth rate for MA benchmarks as well as the end of COVID-19 flexibilities in the calculation of MA star ratings will help lead to the 2.27% cut to plans. 

BMA President Mary Beth Donahue told reporters Wednesday she hopes that Congress will weigh in on the issue. Donahue told Fierce Healthcare Friday that the agency should consider the impact to consumers outlined in the analysis when deciding on whether to finalize the rule. 

Insurer industry group AHIP did not immediately return a request for comment as of press time on the statement.

Becerra’s statement illustrates the forceful pushback the Biden administration is engaging in surrounding the advance notice, which must be finalized by April 3. 

Several congressional Republicans have pointed to the industry statements over MA cuts while criticizing the administration. During the State of the Union, President Joe Biden referenced a plan from Sen. Rick Scott, R-Florida, that would sunset Social Security and Medicare unless Congress acted. 

The latest feud also comes after the MA program has received increased scrutiny over plan risk adjustment practices and whether they are contributing to overpayments to plans. The advisory panel Medicare Payment Advisory Commission has argued that some plans are gaming risk adjustment to get higher risk scores for patients and with it greater quality bonuses.