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Washington, D.C. (Feb. 1, 2024)- The risk adjustment changes made last year were a reasonable first step in addressing the abusive coding practices employed by insurance plans, and we are pleased to see the proposal to continue implementation on schedule. But Congress and the administration ultimately need to do much more to hold Medicare Advantage (MA) plans accountable for delivering value to beneficiaries and taxpayers, as well as rein in the waste and abuse that is driving up spending. 

MA plans systematically overcharge patients and taxpayers by billions of dollars annually. Through egregious billing practices, insurance companies have continued to profit at the expense of seniors and taxpayers despite the important initial steps the Centers for Medicare and Medicaid Services (CMS) has taken to restrain upcoding. CMSnewest proposed changes are estimated to increase plan payments by 3.7% or $16 billion next year. Even as annual overpayments to MA plans exceed $80 billion, about $50 billion from coding alone. These overpayments borne by patients and taxpayers threaten the long-term sustainability of Medicare. 

Again, while initial reform steps are positive, given the substantial amount of overpayments received by plans and ongoing abuses of risk adjustment and upcoding, larger scale reforms are needed to protect and strengthen the Medicare program including increasing the coding intensity adjustment to fully account for plans’ upcoding, and limiting use of information from health risk assessments and chart reviews which account for approximately half of the coding overpayments to plans.” 

Arnold Ventures is a philanthropy dedicated to tackling some of the most pressing problems in the United States. It is a team of more than 120 subject-matter experts headquartered in Houston with offices in New York and Washington, D.C. It works in five key issue areas: Criminal Justice, Education, Health, Infrastructure, and Public Finance. Its work is guided by Evidence-Based Policy, Research, and Advocacy.


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