ICYMI: Cassidy, Letchuman Publish JAMA Viewpoint Calling on Congress to Reduce Overspending in Medicare Advantage

WASHINGTON – U.S. Senator Bill Cassidy, M.D. (R-LA), and Sunjay Letchuman, M.D., published a Viewpoint in JAMA today outlining legislative reforms to reduce coding-related overpayments in Medicare Advantage. More seniors are now enrolled in Medicare Advantage than Traditional Medicare, and total Medicare spending continues to rise. In 2024, the U.S. spent over $1.1 trillion on Medicare, and taxpayers pay the price when overpayments to insurance companies push that number higher. Dr. Cassidy and Dr. Letchuman argue that addressing coding-related overpayments, or “upcoding,” is a critical first step toward a more sustainable Medicare program. Read the full Viewpoint here or excerpts below: For many years, the Medicare Payment Advisory Commission (MedPAC) has found that Medicare spends substantially more for beneficiaries enrolled in Medicare Advantage than it would have spent if those same beneficiaries were in traditional fee-for-service Medicare. In one of its most recent analyses, MedPAC estimated that total payments average 120% of what traditional Medicare would have spent for comparable beneficiaries. Much of this overpayment is attributed to more intensive diagnosis coding in Medicare Advantage and is thus called upcoding. … First, CMS should use 2 years of diagnostic data in the traditional Medicare beneficiary population to calculate the risk score against which the Medicare Advantage enrollee is compared… The Congressional Budget Office estimates this policy would reduce overspending by $124 billion over 10 years. … The second reform relates to in-home health risk assessments. During these assessments, a nurse or other clinician visits a Medicare Advantage enrollee’s home and administers questionnaires or uses diagnostic tools to screen for conditions such as depression or peripheral artery disease. Diagnoses that result from these visits are used for risk adjustment even when not confirmed by a physician or linked to subsequent treatment. The Office of Inspector General found that such diagnoses generated $3.5 billion in risk adjusted payments in 2023. CMS should exclude these diagnoses from counting toward a patient’s health status unless a physician confirms them or they are reflected in subsequent treatment. … The context for the third reform is that Congress requires CMS to apply a downward adjustment to Medicare Advantage risk scores to offset more intensive coding, with a statutory minimum of 5.9 percent. CMS has applied only this minimum every year since it took effect. This should be reformed in two ways. First, CMS should update the adjustment annually rather than leaving it fixed at the statutory minimum. The Congressional Budget Office estimates that increasing the minimum risk score reduction to 8 percent would reduce overspending by $159 billion over ten years. Second, Congress should direct CMS to apply the coding adjustment at the plan level rather than uniformly, starting with a small number of coding-intensity tiers, so that plans that code more aggressively receive a larger downward adjustment. ###