The Department of Health and Human Services (HHS) is examining risk adjustment tactics that have led to overpayments to some Medicare Advantage plans, Secretary Xavier Becerra told reporters Friday.
Becerra said the agency has seen evidence of charges going beyond what would be necessary for MA plans using tactics such as up-coding. The remarks come as some progressive lawmakers have clamored for more scrutiny of the popular program that enables seniors to use their Medicare benefit to buy a private plan.
“So far from what I understand in the evidence and data, it shows that we spend more per Medicare recipient through MA than through fee-for-service,” Becerra said. “We have seen some evidence that in certain areas there seems to be charges that go beyond what would be necessary.”
A common criticism of MA is that some plans introduce risk adjustment tactics that lead to overpayments from Medicare, such as up-coding where providers affiliated with an MA make unnecessary diagnoses that inflate MA patient risk scores.
A September 2021 report from HHS’ Office of Inspector General also found that some MA plans use chart reviews and health risk assessments to add unnecessary diagnoses. A chart review enables a plan to identify any diagnoses that the provider may have missed, and a risk assessment looks at potential gaps in a beneficiary’s care.
Critics say the coding practices have led to large overpayments from Medicare. An analysis from the Kaiser Family Foundation estimated Medicare paid MA plans $7 billion more than traditional Medicare in 2019 and that Medicare spent $321 more per enrollee in MA plans compared to traditional fee-for-service.
Supporters of MA, which grew this year to make up more than 45% of all Medicare enrollment, charge that beneficiaries are getting access to more benefits not offered by traditional Medicare including those that target social determinants of health. They also point to high satisfaction rates for MA plans among beneficiaries.
Becerra didn’t detail the extent of the probe nor what reforms could be triggered to address risk adjustment payments.
The Medicare Payment Advisory Commission (MedPAC) previously recommended to Congress that risk adjustment payments exclude the use of diagnoses documented only on a health risk assessment and apply a coding adjustment to account for differences in codes between MA and fee-for-service. MedPAC, which advises Congress on Medicare payment and policy issues, also called for a new risk adjustment model that relies on two years of fee-for-service and MA diagnostic data, which can improve the accuracy of diagnostic information.
The program has also taken heat from progressive lawmakers including Sen. Elizabeth Warren, D-Massachusetts, who called for reform during a recent Senate hearing.
Becerra said he understands the concerns about the MA program.
“We are going to get our money’s worth for all Americans,” he said. “We don’t want anyone overcharging seniors or any other Medicare recipient for services and we don’t want taxpayers to be duped.”