Statement from Arnold Ventures Executive Vice President of Health Care, Mark E. Miller on the Additional $16 Billion in Plan Payments in Proposed Medicare Advantage and Part‑D Rate Notice

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. CMS’ newest 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 committed to improving the lives of American families, strengthening their communities, and promoting their economic opportunity by investing in research to understand the root causes of America’s most persistent and pressing problems. Founded in 2010 by Laura and John Arnold as part of their Giving Pledge commitment to contribute their wealth to charitable causes during their lifetimes, the philanthropy’s focus areas include higher education, criminal justice, health, infrastructure, and public finance, advocating for bipartisan policy reforms that will lead to lasting, scalable change.

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