Trump administration plans crackdown on Medicare Benefit overcharges : NPR

[ad_1] <img src="https://npr.brightspotcdn.com/dims3/default/strip/false/crop/5809x3873+0+0/resize/1100/quality/50/format/jpeg/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2F09%2F1c%2F99977417410e819c316cfee7ec1f%2Fgettyimages-2252588712.jpg" data-template="https://npr.brightspotcdn.com/dims3/default/strip/false/crop/5809x3873+0+0/resize/{width}/quality/{quality}/format/{format}/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2F09%2F1c%2F99977417410e819c316cfee7ec1f%2Fgettyimages-2252588712.jpg" class="img" alt="Dr. Mehmet Oz leads the Centers for Medicare & Medicaid Services. A CMS plan to keep payments to Medicare Advantage flat in 2027 roiled health insurance stocks this week." fetchpriority="high"/> Dr. Mehmet Oz leads the Facilities for Medicare & Medicaid Providers. A CMS plan to maintain funds to Medicare Benefit flat in 2027 roiled medical insurance shares this week. Anna Moneymaker/Getty Photos cover caption

toggle caption

Anna Moneymaker/Getty Photos Medicare Benefit well being plans are blasting a authorities proposal this week that might maintain their reimbursement charges flat subsequent 12 months whereas making different cost adjustments.

However some well being coverage consultants say the plan might assist cut back billions of {dollars} in overcharges which have been widespread in this system for greater than a decade.

On Jan. 26, Facilities for Medicare & Medicaid Providers officers introduced they deliberate to lift charges paid to well being plans by lower than a tenth of a p.c for 2027, far lower than the trade anticipated. A few of the largest, publicly traded insurers, reminiscent of UnitedHealth Group and Humana, noticed their inventory costs plummet in consequence, whereas trade teams threatened that folks 65 and older might see service cuts if the federal government did not kick in more cash.

In Medicare Benefit, the federal authorities pays non-public insurance coverage corporations to handle well being look after people who find themselves 65 and older or disabled.

"Chart critiques" Much less seen within the brouhaha over charges: CMS additionally proposed limiting plans from conducting what are referred to as "chart critiques" of their clients. These critiques may end up in new medical diagnoses, typically together with situations sufferers have not even requested their medical doctors to deal with, that improve authorities funds to Medicare Benefit plans.

The apply has been criticized for greater than a decade by authorities auditors who say it has triggered billions of {dollars} in overpayments to the well being plans. Earlier this month, the Justice Division introduced a document $556 million settlement with the nonprofit well being system Kaiser Permanente over allegations the corporate added about half one million diagnoses to its Benefit sufferers' charts from 2009 to 2018, producing about $1 billion in improper funds.

KP didn't admit any wrongdoing as a part of the settlement.

"I do suppose the administration is severe about cracking down on overpayments," mentioned Spencer Perlman, a well being care coverage analyst in Bethesda, Maryland.

Perlman mentioned that whereas the Trump administration strongly helps Medicare Benefit, officers are "troubled" by plans that rake in undue income by utilizing chart critiques to invoice the federal government for medical situations even when no remedy was offered.

In a information launch, CMS Administrator Mehmet Oz mentioned curbing this apply would guarantee extra correct funds to the plans whereas "defending taxpayers from pointless spending that isn't oriented in the direction of addressing actual well being wants."

"These proposed cost insurance policies are about ensuring Medicare Benefit works higher for the individuals it serves," Oz mentioned.

Richard Kronick, a former federal well being coverage researcher and a professor on the College of California-San Diego, referred to as the proposal "at the least a mildly encouraging signal," although he mentioned he suspected well being plans may finally discover a method round it.

Kronick has argued that switching seniors to Medicare Benefit plans has price taxpayers tens of billions of {dollars} greater than preserving them within the government-run Medicare program, due to unbridled medical coding excesses. The insurance policy have grown dramatically lately and now enroll about 34 million members, or greater than half of individuals eligible for Medicare.

David Meyers, an affiliate professor on the Brown College College of Public Well being, referred to as the proposed restriction on chart critiques "a step in the fitting course."

"I feel the administration has been signaling fairly strongly they wish to in the reduction of on inefficiencies," he mentioned.

The outcry from trade, principally directed on the proposal to basically maintain Medicare Benefit cost charges flat, was fast and sharp.

"If finalized, this proposal might end in profit cuts and better prices for 35 million seniors and folks with disabilities once they renew their Medicare Benefit protection in October 2026," mentioned Chris Bond, a spokesperson for AHIP, previously referred to as America's Well being Insurance coverage Plans.

CMS is accepting public feedback on the proposal and says it's going to problem a closing resolution on the cost charges and different provisions by early April.

Meyers mentioned well being plans usually declare they are going to be pressured to slash advantages once they aren't happy with CMS funds. However that not often occurs, he mentioned.

"The plans can nonetheless make cash," he mentioned. "They principally are very worthwhile, simply not as worthwhile as shareholders anticipated."

The federal government pays Medicare Benefit plans greater charges to cowl sicker sufferers. However over the previous decade, dozens of whistleblower lawsuits, authorities audits, and different investigations have alleged that well being plans exaggerate how sick their clients are to pocket funds they do not deserve, a tactic recognized within the trade as "upcoding."

Many Medicare Benefit well being plans have employed medical coding and analytics consultants to assessment sufferers' medical charts to seek out new diagnoses that they then invoice to the federal government. Medicare guidelines require that well being plans doc — and deal with — all medical situations they invoice.

But federal audits have proven for years that many well being plans' billing practices do not maintain as much as scrutiny.

A December 2019 report by the Division of Well being and Human Providers inspector basic discovered that the well being plans "virtually at all times" used chart critiques so as to add, fairly than delete, diagnoses. "Over 99 p.c of chart critiques in our assessment added diagnoses," investigators mentioned.

The report discovered that diagnoses reported solely on chart critiques — and never on any service information — resulted in an estimated $6.7 billion in funds for 2017.

This week's proposal isn't the primary time CMS has tried to crack down on chart critiques.

In January 2014, federal officers drafted a plan to limit the apply, solely to abruptly again off a number of months later amid what one company official described as an "uproar" from the trade.

The medical insurance trade has for years relied on aggressive lobbying and public relations campaigns to combat efforts to rein in overpayments or in any other case cut back taxpayers' prices for Medicare Benefit.

What occurs this time will say quite a bit in regards to the seriousness of the Trump administration in its crack down on controversial, long-standing cost practices in this system.

Perlman, the coverage analyst, mentioned it's "fairly widespread" for CMS to partially backtrack when confronted with opposition from the trade, reminiscent of by phasing in adjustments over a number of years to melt the blow on well being plans.

David Lipschutz, an lawyer with the Heart for Medicare Advocacy, a nonprofit public curiosity regulation agency, mentioned finalizing the chart assessment proposal "can be a significant step in the direction of reining in overpayments to Medicare Benefit plans.

"However up to now, he mentioned, even a minor change to Benefit funds has led the trade to protest that "the sky will fall in consequence, and the proposal is normally dropped."

"It is exhausting to inform at this stage how it will play out," Lipschutz mentioned.

KFF Well being Information is a nationwide newsroom that produces in-depth journalism about well being points and is likely one of the core working applications at KFF.