Bipartisan Senate bill aims to take on Medicare Advantage up-coding practices

New bipartisan legislation hopes to cut overpayments to Medicare Advantage (MA) plans as federal government efforts have run into a massive opposition campaign. 

Sens. Bill Cassidy, R-Louisiana, and Jeff Merkley, D-Oregon, introduced the No Unreasonable Payments, Coding or Diagnoses for the Elderly Act on Monday. The bill would impose changes to MA risk adjustment (PDF) and prevent Medicare from being charged for only relevant medical conditions. 

“Medicare is going insolvent in four years,” Cassidy said in a statement. “The challenge is preserving that which is good while squeezing out waste. This bill is a step in that direction.”

The senators hope the bill will get rid of financial incentives for MA plans to no longer game risk adjustment in order to get higher Medicare payments. 

Critics have been concerned about whether MA plans are inflating the risk scores of patients to make them appear sicker than they actually are in order to get higher payments from Medicare. 

If signed into law, Cassidy and Merkley’s bill would exclude diagnoses from chart reviews and health risk assessments in the calculations of a patient’s risk score. Both tools have become key sources of up-coding by MA plans, according to the Medicare Payment Advisory Commission. 

The bill would also enable the Centers for Medicare & Medicaid Services (CMS) to use two years of diagnostic data for developing a risk adjustment model instead of only one year.

CMS must also weigh the impact of any differences in coding patterns between MA plans and providers under Medicare Parts A and B. The agency must publicly report the results, with the goal being closing a gap between how a patient is assessed for MA and traditional Medicare. 

The new legislation comes amid a feud between CMS and MA insurers over new regulations surrounding the popular program, which has more than 30 million beneficiaries. 

CMS proposed a 1% bump to MA plans alongside changes to the risk adjustment model set to take effect in 2024. However, insurers fielded their own analyses that show the rule will result in a 2.27% cut after factoring in changes to star ratings amid other reasons. 

Insurer groups have launched TV ads and widespread lobbying campaigns to get CMS to reverse course, while Department of Health and Human Services Secretary Xavier Becerra has said claims the rule will cut payments are “categorically false.”

It remains unclear whether the bipartisan legislation would be able to bridge the divide.

The advocacy group Center for Medicare Advocacy, which has pressed for CMS to crack down on MA up-coding, said the bill may be able to help some, but more is needed.

"Addressing the abuse of risk-adjustment is certainly a start," said Executive Director Judith Stein in a statement to Fierce Healthcare. "The real solution, however, is to embrace the original goal of privatized Medicare plans. The stated goal was to provide equivalent care for a lower per-person cost. This has absolutely failed, as MA plans continue to be paid more per beneficiary than traditional Medicare costs."