The General Accountability Office (GAO) estimates that the Centers for Medicare & Medicaid Services (CMS) overpaid Medicare Advantage (MA) plans between $3.2 and $5.1 billion from 2010 to 2012. GAO released the estimates last week in its report, Medicare Advantage: Substantial Excess Payments Underscore Need for CMS to Improve Accuracy of Risk Score Adjustments. The Affordable Care Act (ACA) reduces excessive payments to MA plans; however, according to the GAO report, CMS continues to adjust payments to MA plans based on plan reports of the relative health and risk associated with each beneficiary. MA plans continuously reported higher beneficiary risk than actually supported by medical records, resulting in overpayments.
As policymakers continue to look for ways to achieve federal savings in the Medicare program, some have proposed policies to turn Medicare into a premium support model, or voucher program, raise Medicare’s age of eligibility or impose further means testing on middle class beneficiaries. All of these options increase health care costs for older adults and people with disabilities, many of whom are in no position to pay more. According to the GAO, if CMS adjusted MA risk scores by 6.4 percent, thus reducing overpayments to MA plans, the result would be billions of dollars in savings to the Medicare program. Policymakers should look at policies like this as well as other worthwhile options, like obtaining lower prices for pharmaceutical drugs and advancing the delivery system reforms in the ACA, to strengthen the Medicare program.
Read the GAO report.
Read the GAO report.